EVERYBODY LOVES RAYMOND… Insurance

Vocabulary Risk – uncertainty, chance of loss or injury Risk Avoidance – “avoid” a problem / prevent Risk Reduction – “reduce” the chance of loss/injury Risk Shifting – buying insurance – “shift” the risk of loss to insurance company Hazards – anything that increases the likelihood of a loss Personal Risk – loss of income or life Property Risk – losses to property Liability Risk – losses caused by negligence (injury or property damage) Premium – cost for insurance Deductible – amount of “out of pocket” costs before insurance will pay

Why Insurance??? What Can Be Insured??? To protect against loss of assets… Provide sense of security against financial loss… House (home owner’s insurance) Car (auto insurance) Apartment (renter’s insurance) Health (health insurance) Life (life insurance) Body Parts (if related to your work) Injury (disability insurance) Weather Travel insurance

Auto Insurance Statistics - USA Car Insurance  According to the Insurance Information Institute, the average auto insurance expenditure dropped from $799 in 2007 to $797 in  The average expenditure was highest in New Jersey ($1,184). RankMost expensive statesAvg ExpenditureRankLeast expensive statesAverage Expenditure 1New Jersey$1, Idaho$ D.C.1, South Dakota Louisiana1, North Dakota New York1, Iowa Florida1, Maine Delaware1, North Carolina Rhode Island1, Wisconsin Michigan983.68Nebraska Connecticut Wyoming Maryland Ohio619.96

Auto Insurance Coverages Bodily Injury Liability:  covers financial loss due to legal expenses, medical expenses, lost wages, etc. associated with injuries caused by an accident which you were responsible…  Expressed as 3 numbers: 100/300/50 (max coverage in $1,000’s)  $100,000 max paid for injuries to any one person  $300,000 paid in total (2+ people)  $50,000 paid for property damage Collision Coverage:  Pays for damage to your automobile, regardless of who is at fault…  If you are not at fault, your insurer will try to collect from the other driver’s property damage liability first…  Coverage limited to the retail value of your vehicle… Comprehensive Coverage:  Covers damage to your vehicle not caused by a collision, such as:  Fire, theft, vandalism…  Glass breakage…  Hail, sand, wind storms…  Falling objects or hitting an animal…

Auto Insurance Premium Factors What factors affect the premium you will pay???  Vehicle Type (year, make, model, theft rate)  Rating Territory (accident, theft, & vandalism rates in the area where you live)  Driver Classification (age, gender, marital status, credit history, driving record, driving habits) Reducing Auto Insurance Premiums  Compare Companies  Premium Discounts:  Good driver  Good student  Security systems  More than one vehicle insured with that company  More than one type of policy with that company (home owner’s)  Larger deductibles NJ DMV Auto Insurance Requirements:

Health Insurance Copayment:  Cost sharing in the form of a flat dollar amount that you pay, such as $5 per dr. visit or $20 ER visit or $10 Rx… Coinsurance:  Coverage for a % of expenses (ex: 75% or 80%) after the deductible amount is met… Benefit Limits:  Max dollar amount of coverage/max days in hospital Exclusions & Limitations:  Examples include pre-existing conditions & cosmetic surgery Guaranteed Renewable:  Insurer can’t cancel policy unless insured person rails to pay premiums; insurer can’t raise premiums for one person unless raised for an entire group…

What if I am disabled and can't work? There are basically three ways to replace income:  Employer-paid disability insurance  Social Security disability benefits  Covers total disability lasting > 12 months  Starts in the 6th month  Strict definition of disability to qualify  Individual (private) disability income insurance policies  Supplements other disability income sources  Normally provides 40-60% of income (up to 75%)  AFLAC Workman’s Compensation:  Disability from on-the-job accident or illness

Life Insurance  Experts say you should have roughly 10 times your income in life insurance.  Buy life insurance when you are young and healthy. Home Insurance  According to the Insurance Information Institute, homeowners spend an average of $615 on their property insurance.  More than 8% of homeowners don't have insurance.  According to statistics, 32% of home insurance claims are a result of fires, 21% wind and hail, 21% Water/Ice damage, and 12% for theft.

Useful Links for More Information Basic Auto Ins: Insurance4USA: Crazy things people insure:   Snow Insurance: