Insurance PPT Notes

1. Insurance PPT Notes Risk Management Unit

2. Risk ManagementGA Performance Standards BCS-LEB-14: The student analyzes the purpose of business insurance. • a. Determines different types of insurance coverage needed for business. • b. Assesses the effectiveness of insurance products in relation to cost. BCS-LEB-16: The student analyzes automobile insurance. • a. Evaluates different types of automobile insurance coverage, including riders and endorsements. • b. Determines the effect of various factors on insurance rates. • c. Examines ways to reduce the cost of insurance. • d. Identifies reasons for policy cancellation. BCS-LEB-17: The student analyzes business property insurance. • a. Describes coverage common to most policies and explains how the amount needed is determined. • b. Describes special coverage available. • c. Explains variances in rates and determines how to obtain the best rates. • d. Compares the difference between replacement and value coverage. • e. Examines types of business property coverage. • f. Explains how to inventory and document all business property and how to use riders and endorsements to cover specific needs. GPS Academic Standards: • MM3P1. Students will solve problems (using appropriate technology). • MM3P4. Students will make connections among mathematical ideas and to other disciplines.

3. Risk Management Essential Questions • What kind of insurance do businesses need? • What are the different kinds of automobile insurance/ • How is the needed amount of insurance coverage determined? • What are valid reasons for policy cancellation?

4. Purchasing Insurance Insurance Companies Many people purchase insurance from an insurance agent . Types of insurance agent: An agent who works for a large insurance company and sells only policies written by that company An independent agent who sells many kinds of policies from a number of different companies Insurance protection can be obtained in several ways: . . . . . Insurance Basics • The insurance company, called the . • The person or business for which the insurer assumes the risk is the insured. • The person or company buying the . • A premium or amount the policy holder must pay for insurance coverage is paid monthly, quarterly, every six months, or annually. • A claim is a policyholder’s request for payment for a loss that the insurance policy covers.

5. Business Insurance Insuring Personnel Health insurance – . With group insurance the employees of a business and their dependents can be covered under one policy Disability insurance – . Worker’s compensation is a system of insurance set up by state law that pays employees who are injured on the job. Life insurance – . The payment is made to the beneficiaries indicated in the policy; usually family members. Insured Losses • Both consumers and businesses can buy insurance to cover almost any kind of economic loss. • Ex: Violinists can insure their fingers. Writers may insure their manuscripts. Professional athletes can insure against injuries. • Consumers find . • Businesses also . • Businesses also need .

6. Business Insurance Cont’d Insuring Business Operations Insurance may be purchased to cover the financial losses that result from the actions of employees or business operations. Business interruption insurance – . Liability insurance – covers claims by others based on damages suffered because of business operations, employees, or products. Ex: . Insuring Property • Businesses want to protect . • Commercial property insurance – • Vehicle insurance – Commercial vehicle insurance covers 1) damages to the vehicles and occupants 2) property damage, and 3) medical costs for the injured resulting from accidents are covered.

7. Types of Vehicle Insurance • The types and amount of protection you have with an insurance policy depends on how much you are willing to pay. • Seven types of protection: • Bodily injury liability coverage – a required protection that covers injuries to someone else. Ex: 100/300 indicates . • Property damage liability coverage – covers damage to another person’s vehicle or other property caused by the insured. Ex: 100/300/50 indicates . • Collision insurance coverage – covers damage to the policyholder’s vehicle. The maximum amount covered is determined by the actual cash value which is calculated . • Medical payments coverage – covers injuries to drivers and anyone else in the vehicle • Comprehensive coverage – . • Uninsured/ underinsured motorists protection - • Miscellaneous coverage – . • A driver should at least have liability insurance (required by most states) to protect the vehicle owners from claims of injury or property damage and then add other types of coverage.

8. Vehicle Insurance The Costs of Insurance The more money insurance companies pay in claims . The insurance premium(amount the policy holder must pay for insurance coverage) . A deductible is . Ex: $700 for repairs - $500 deductible = $200 paid by insurer Laws on Vehicle Insurance • Vehicle laws vary by state but all states have some form of . • With no fault insurance, . • Most states also have some form of compulsory insurance law the requires drivers to have a minimum amount of car insurance.

9. Property Insurance • Property insurance provides protection from financial loss on property caused by natural disasters and lesser causes like accidents, theft, and vandalism. • Two kinds of property you can insure: real property (property attached to land) & personal property (possessions that can be moved)

10. Homeowner’s Policies • Protect against loss from fire, windstorm, explosions, riot or civil commotion, and other perils • Homeowner’s policies offer four types of protection: • . • . • . • . • Standard homeowner’s policies do not cover . • Insurance for natural disasters costs more where they are known to occur regularly. • Insurance companies usually recommend that homeowners insure their home for 80% of its market value. • You can insure property for either its actual cash value (value of the property – depreciation) or its replacement value which is the full cost of repairing or replacing property.

11. Life Insurance • Life insurance – insurance that pays proceeds (funds) to a beneficiary when the insured person dies • Types of life insurance • Cash value – • Whole life – • Universal life – • Variable life – • Term – • The premium amount depends on the type of policy and amount of coverage.

12. Health Insurance • Health insurance – provides protection against the costs of illness and accidents • . • . • Many policies will not cover pre-existing conditions -- a serious health condition diagnosed before a person obtained health insurance.

13. Health Insurance • Major medical insurance – • Hospital expense insurance – pays for hospital care for a given period of time; covers room & board, tests, and x-rays, operating room costs, nursing care, and fees for medicine and treatment • Surgical expense insurance – pays part of a surgeon’s fee for an operation • Medical expense insurance – covers the costs of a doctor’s care not involving surgery • Group health insurance – the least expensive form of health insurance for most people and is provided to employees by a company • Health maintenance organization (HMO) – • Preferred provider organization (PPO) – • Government health insurance • Medicare – • Medicaid –