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

Chapter 25 Introduction to Risk Management

Types of Risk Risk – Pure Risk – Speculative Risk – Economic Risk –

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

Insurance Terms Insurer – Policy – Premium – Policyholder –

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

Chapter 26 Property and Liability Insurance

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)

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

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 –

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

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

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

Chapter 27 Health and Life Insurance

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

Health Insurance Types of Coverage ◦ Basic Health Insurance – ◦ Major Medical Insurance – ◦ Dental and Vision Insurance –

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.

Health Insurance Medicare – Medicaid –

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.

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