I am so happy to have you all in class today  Wednesday, January 3, 2018 Welcome! I am so happy to have you all in class today  Do Now: Make sure your cell phones are on silent and off to the side. Have something to write with and something to write on. Be seated before the bell rings.

Objectives: Explain the concept of risk and list several types of risk. Explain the concept of insurance and how risks are spread.

Types of Risk Risk Uncertainty Two types of risk: is a state of uncertainty, where certain situations will result in some sort of loss or another undesirable outcome Uncertainty is the likelihood that something will or will not happen Two types of risk: Pure Risk Insurable Risk

Types of Risk: Pure Risk Has to deal with a chance of loss with no chance for gain. Completely random, having the ability to happen to anyone at any time Examples? Acts of nature Illnesses Accidents resulting in injury (physical or property)

Types of Risk: Insurable Risk Being able to reduce the negative consequences of pure risk by purchasing insurance Insured Risk is often faced and calculated by a large number of people Gender comparison  Auto Insurance Natural Disaster  Home/Renters/Business Insurance Insurable Interest must be present to purchase insurance!!!

Types of Risk: Insurable Risk Is is possible to get discounts on your insurance policy? Insurable Risk = Umbrella Coverage Personal Risk Property Risk Liability Risk

Personal Risk The chance of loss involving your income and/or a standard of living How to protect yourself and/or others: Purchasing life, health, and disability insurance

Property Risk The chance of loss or harm to personal or real property Includes home, car, or other possessions Destruction comes in form of fire, wind, rain, accident, etc. How to protect your property? Property Insurance

Liability Risk The chance of loss that occurs when your errors or actions results in the injuries to others or damages to their property Damages comes from accidents while driving car, reckless injury on your property from your property, etc. How to protect your self? Liability Insurance

I am so happy to have you all in class today  Thursday, January 4, 2018 Welcome! I am so happy to have you all in class today  Do Now: Make sure your cell phones are on silent and off to the side. Have something to write with and something to write on. Be seated before the bell rings.

Common Risks, Causes, Ways to Protect

Spreading the Risk: How Insurance Works Example: Suppose you textbook for a class costs $60. What happens if you lose the book, and you don’t have an insurance policy on that book? What happens if you lose the book, but you have an insurance policy for the book?

Spreading the Risk: How Insurance Works When you purchase insurance, you join a risk-sharing group (receiving a policy) Policy received informs the insurer to assume an identified risk for a fee (premium) Note that insurance is not there to help enrich, rather to compensate When compensation is paid, the indemnification process has begun

Assignment: Complete the handout provided. Define the following vocab terms on the back of the handout.