Insurance: Your Protection Financial Literacy Mrs. Clark

Can You Believe? The number of insurance claims for auto accidents involving teens is ____% higher than those for adults. Teen crash rates drop by ____% six months after getting their license.

Can You Believe? In the latest survey available, ____% of the U.S. population experienced some level of disability in a year. Head injuries cause about ____% of all bicycling fatalities.

Can You Believe? There is a ____% chance you’ll be involved in an alcohol-related traffic accident at some point in your life. At work, a disabling injury occurs every ____ seconds.

Can You Believe? Sixteen-year-old drivers have ____ times the risk of being in a crash compared to 18-year-old drivers.

Could you afford to pay for the damages you caused in a car wreck?

Why have insurance? Why should we even bother with insurance? What are the advantages and disadvantages?

Risk Management What is risk management? ~ Using various ways to deal with potential personal and financial loss.

Risk Management “In exchange for a relatively small payment, which is the premium, you’re protected against the chance of a big financial setback, a large loss.”

Risk Management Means you use various ways to deal with potential personal or financial losses. 3 ways to manage personal/financial risk Avoid risk altogether Minimize risk Transfer risk

Insurance Protection against large-scale financial loss

Insurance Premium The payment you make to an insurance company in exchange for its promise of protection and help. Can be monthly, quarterly, semi-annually, or annually.

Coverage Limit A coverage limit is the maximum amount the insurance company will pay in the event of a claim.

Deductible The amount of the loss you must pay out of your own pocket before the insurance company begins to reimburse you. Range from $100-$1,000+ SHOP AROUND for best rates

Auto Insurance Liability Coverage Medical Payments Uninsured Motorist Underinsured Motorist Collision Other than collision

Liability Pays for bodily injury to other people and damage to their property.

Medical Pays for medical expenses for you, your family members, and anyone riding with you in your car.

Uninsured Motorist Pays for yourself if the other driver doesn’t have insurance coverage.

Collision Pays for your car repair.

Other than collision This covers damage from theft, hail, floods, vandalism, etc.

Coverage Amounts Liability: $250,000 per person $500,000 per accident Medical: $5,000 per person Uninsured/Underinsured Motorist: $250,000 per person $500,000 per accident.

The following factors can influence the cost of the policy. Auto Policies The following factors can influence the cost of the policy. Mileage Location Law Enforcement Driving Record Age Gender Marital Status Type of Car Cost of Repairs

Future Insurance Needs Health Insurance Property Insurance Life Insurance Disability Insurance Liability Insurance

Medical Insurance Pays the medical bills in case you or your family members, become sick or injured. Group policy offered by an employer who contributes to the plan. Most will cover you until age 19. If you are in college, they may extend until 23.

Property Insurance Protects your material possessions in case they are damaged by fire, flood, or theft. Homeowner’s insurance vs Renter’s Insurance

Homeowners Insurance Covers the house itself against damage from fire, flood, and theft.

Renters Insurance Covers your goods and not the building you rent.

Life Insurance Anytime someone else depends on your income to help pay bills, you need life insurance. Protects people who depend on you financially in the event of your untimely death. Term Life vs Whole Life

Term Life Insurance More affordable Meet your life insurance needs most often while you are young and single.

Whole Life Insurance More expensive. It will provide protection and builds up a savings account. Can borrow against in a later time if needed.

Disability Insurance Pays for your income from a job if you are sick or physically unable to work for long periods of time Insurance typically pays 60-70% of your full-time wage. Short Term: up to 2 years. Long Term: 1 year to retirement.

Liability Insurance Covers you from costly legal fees and multi-thousand dollar settlements in court cases or as enhancement coverage, often called an umbrella policy. If you own a house and drive a car, you should have an umbrella policy.