Risk Management

1. Risk Management Ch 25 - Introduction Ch 26 - Property & Liability Insurance Ch 27 - Health & Life Insurance

2. Chapter 25 Introduction to Risk Management

3. Types of Risk • Risk – • Pure Risk – • Speculative Risk – • Economic Risk –

4. Types of Risk • Insurable Risk – • ____________: loss of income or standard of living (life, health, and disability insurance) • ____________: harm to personal or real property (auto, home insurance) • ____________: Loss that may occur when your error or actions injures others or their property

5. Insurance Terms • Insurer – • Policy – • Premium – • Policyholder –

6. Reduce Insurance Costs • Increase __________ • Deductible – • Purchase _______ insurance • Consider _______ _______ • Look for ________opportunities • ___________ shop

7. Chapter 26 Property and Liability Insurance

8. Property & Liability Insurance • Renters Insurance • _________________– Possessions that could be damaged by fire, smoke, water, moisture, freezing, or heat. • _________– Someone is injured while in your rented home/apt. • ____________ – additional personal property (car belongings, jewelry)

9. Property & Liability Insurance • Homeowner’s Insurance • __________: fire, water, wind, and smoke that may cause physical damages • ________:criminal activity (robbery, burglary, arson, and vandalism) • ________:the cost of another person’s losses for injuries at your property

10. Property & Liability Insurance • Homeowner’s Insurance • How much coverage do you need? • Amount of building • ½ of that amount for it’s contents • Exclusions – • Replacement value – • Claims adjusters –

11. Property & Liability Insurance • Automobile Insurance • Minimum requirements are set by the _____. • Covers costs of:

12. Cost of Auto Insurance • Factors of Cost: • ______________– number and type of traffic tickets • ____________ – older cars (except antiques) are less because of replacement value • __________– age, marital status, geographic location • ______________ – how much you drive on a daily basis, adding a teenager, number of accidents

13. Property & Liability Insurance • Types of Auto Insurance Coverage • Liability – • Collision – • Comprehensive– • Personal Injury Protection (PIP) – • Uninsured/Underinsured –

14. Chapter 27 Health and Life Insurance

15. Health Insurance • Health Insurance – • Group Policies • Group Insurance: most common, provided by employers • COBRA: Consolidated Omnibus Budget Reconciliation Act – continued coverage when you leave a job • HIPAA: Health Insurance Portability & Accountability Act of 1996 makes it illegal for an insurer to deny coverage based on health status

16. Health Insurance • Types of Coverage • Basic Health Insurance – • Major Medical Insurance – • Dental and Vision Insurance –

17. Health Insurance • Health Plans • Unmanaged Care – traditional fee-for service plan, choose any doctor and be reimbursed after deductible. • Managed Care • _____: Health Maintenance Organization. Coverage for PCP (primary care physician) on their list. • _____: Preferred Provider Organization. Coverage for a group of providers. Can go outside the list for an additional fee • ____: Point of service. More choice and more control.

18. Health Insurance • Medicare – • Medicaid –

19. Disability & Life Insurance • Disability Insurance: • Group Disability Insurance – covered by employer • Social Security Disability Insurance – you are entitled to payments from Social Security in the event you become disabled and cannot work. • Workers’ Compensation Insurance – covers expenses if your injury or illness resulted from your job.

20. Disability & Life Insurance • Life Insurance – • ___________ Life Insurance – lasts for a specified period of time (20 years); most common type is known as term life • ___________ Life Insurance – remains in effect for the insured’s lifetime and builds cash value; several types including whole life, limited-pay life, universal life, and variable life