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Unit 8: INSURANCE. 1. According to the Unit 8 reading: Risk is defined as …. Chance of loss from some type of danger. . 2. Define Risk Management . How you deal with the chance of a potential personal or financial loss. 3. Identify the four options for managing your risk . Avoid risk -
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1. According to the Unit 8 reading: Risk is defined as ….. • Chance of loss from some type of danger.
2. Define Risk Management • How you deal with the chance of a potential personal or financial loss
3. Identify the four options for managing your risk • Avoid risk - • walk • Reduce risk – • slow down • Accept risk – • Don’t buy the warranty • Share risk – • Insurance
4. Identify three potential risks that teens face. For each one, explain how a teen can reduce the risk of that specific situation or avoid the risk all together.
5. Define Insurance - • Guaranteeing your financial protection against various risks
6. Define Insurance policy – • Written contract detailing what an insurance company will cover, how much it will pay, and how much you will pay
7. Define Premium - • Amount you pay for an insurance policy • #8. How can premiums be paid? • Monthly, quarterly, semi-annually, annually
9. Explain why Insurance is considered “sharing the risk”? • If you take the risk of driving and do not have insurance, then you own all the risk take all of the responsibility to pay • If you take the risk of driving and you do buy insurance, then you own a % of the risk and share a % of the risk with the insurance company. You take some responsibility to pay and the insurance company shares some of the responsibility to pay
10. List 4 factors that affect your insurance premium: • Type of …and Amount of…Insurance you choose. • Size of deductible • Various companies • Age • Marital status • Where you live • Credit History
11. In the US, insurance is a … and not a ….. • PRIVILEGE • RIGHT
12. Define coverage limit – Max amount the insurance co. will pay
13. Define deductible • The amount of a loss you must pay “out of pocket” before the insurance co. will pay the rest.
14. If you have health insurance and need a minor surgery that costs $2000. Your deductible is $500. How much will you pay and how much will your insurance pay? Bill $2000 Pay your deductible $500 Balance = $1500 – paid by insurance co.
15. If your deductible is higher, your premiums are usually … • Lower • Why do You think?
16. What’s the benefit if you have multiple insurance policies from the same agent/company? • Discounts • Lower premiums Name some Insurance co’s.
17. Make a list of at least three personal belongings that you would hate to lose. Estimate and write the approximate cost to replace them. House Car Wedding Ring $200,000 $10,000 My life
18. Factors affecting Auto Ins. • Age • Older = lower • Gender • Female = lower • Marital Status • Married = lower • Type of Car • Family car = lower • How often you use car • Less = lower • Location • Rural = lower • Driving Record • Clean = lower • Claim Record • Less = lower • Credit History • Higher = lower
19. Is it cheaper to be on your parent’s insurance, or to buy your own? • Parents
20. Types of Coverage • General Liability • Covers damage you cause to others property and/or bodily injury outside of your car • Medical Payment • Bodily injury expenses to you and people inside of your car • Also covers you in accident with car if you are on foot or bike or in a friend’s car
Collision • covers damages you cause to your car (accident with another car or object) • Comprehensive • Fire, vandalism, break in, theft, natural disasters (anything except actual collision) • Uninsured Motorist • Lost wages and medical expenses if you are in accident with driver with no insurance
Underinsured Motorist • Covers you when the cost of repairs (accident caused by another driver) exceeds his coverage limits
