Chapter 6 Personal Risk Management

Slide 2 What Is Risk? 6-1 Risk Assessment and Strategies Risk is the chance of injury, damage, or economic loss. Probability is the likelihood of a risk. A loss refers to physical injury, damage to property, or disappearance of assets.

Slide 3 What Are the Types of Consumer Risk? 6-1 Risk Assessment and Strategies Personal risk means you could lose something of personal value. o Example: breaking a leg  missing fun activity Some risks result in a financial loss. o Example: driving without insurance  paying a lot of money to repair car Some risks jeopardize financial resources. o Example: getting sued for causing an injury to another  having your wages garnished to pay for judgment against you

Slide 4 How Can You Manage Risk Using Risk Strategies? 6-1 Risk Assessment and Strategies Risk assessment involves identifying risks and deciding how serious they are. Use risk strategies to protect yourself against loss. o Reduce risk (change your actions) o Avoid risk (stop a certain behavior) o Transfer risk (buy insurance) o Assume risk (self-insure)

Slide 5 Risk Assessment 6-1 Risk Assessment and Strategies Risk Probability of Occurrence Seriousness Rating* Possible Consequences Losing my jobMedium10  Missed payments  Lower credit rating Getting in a car accident Unknown10  Personal injury  Lawsuit Suffering physical injury from snowboarding Medium3  Missed work time  Medical bills Having bike stolen Low2  New/used bike purchase * 1 is low risk; 5 is medium risk; 10 is high risk

Slide 6 Building Communications Skills Reading Speed Select reading material carefully for value. Preview the material. Do not skim or skip passages. Read in the correct order. Adjust reading speed to suit the material. Read groups of words at a time. Use a pacer to focus your eyes on the page. Read in a quiet place. 6-1 Risk Assessment and Strategies