1. Risk Management and Property/Liability Insurance

2. What is Insurance?
______________ is a means of protecting against loss.
The insured pays for insurance to the insurer who will pay the insured if a covered loss or injury occurs.
A risk for insurance purposes is the possibility that you may have to pay out money (having a “financial loss”) due to an accident occurring.
Hospital and doctor bills, or repair costs for items you own & lawsuits are common financial losses.
9/9/2018

3. List the common types of insurance and their purpose.
_______________pays the beneficiary a set amount upon the death of a specified person.
________________provides insurance intended to indemnify for harm to the insured’s personal or real property brought about by perils such as fire, theft, and windstorm.
_________________providing liability and other coverage for the operation of a motor vehicle.
_______________pays for medical expenses
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4. What is the reason most people purchase insurance?
People purchase insurance to help them manage _________________.
By paying a small amount monthly to an insurer, a fund is built among the insured, from which to pay those insured persons who suffer a loss for which they have purchased insurance.
This spreads the loss among a greater number of people.
9/9/2018

5. What is Risk?
The ___________________________________________
___________________________________________.
A _________________ is the chance that something unexpected is going to happen.
What are some types of risks you face as teenagers?
Examples might include getting hurt in a car wreck or while riding their bike; having their bike, phone, backpack, etc. stolen; or getting into a fight. What are some risks you may face as adults?
Examples might include getting cancer; getting laid off from a job; having a fire or flood ruin their home; having a spouse die or get very ill.
9/9/2018

6. Renter Insurance
If you're a renter, you may not think you need insurance at all. (Your landlord already has insurance on the building, right?) But you may not realize that your landlord's policy doesn't cover any of your personal property. What would happen if:
Your apartment building burned down?
A thief broke into your town house?
A guest slipped and injured himself in your kitchen?
The home you're renting suffered water damage?
Without renters insurance, _____________________________________________ _____________________________________________ ____________________________________________.
9/9/2018

7. Items Covered in a Renter’s Policy
Personal property
Personal liability
Additional living expenses
A landlord’s insurance usually won’t cover your personal belongings! Only 40% of renters have renter’s Insurance

8. The main types of life insurance.
_________________is written for a certain number of years. If the insured dies within the policy term, the beneficiary receives the face value of the policy.
_________________provides for the payment of premiums for as long as the insured lives or until age 100. The premiums remain constant and a portion of the premium goes into a savings program against which the insured can borrow at a low interest rate. If the insured dies the face value less any outstanding loans against it is paid to the beneficiary.
9/9/2018

9. What Affects the Cost of Homeowner’s or Renter’s Policies?
Location of home or apartment
Type and age of the structure
Amount of coverage and deductibles
Discounts - alarm system, smoke detector
Varies company to company - compare
If you also insure your car with the same company

10. Umbrella Policies What is this? Why is it important?
An umbrella insurance acts
___________________________________________________________
_____________________________________________________________
EX: You have a car insurance policy that covers personal injury up to $1M. You can also have an umbrella policy on top of the car insurance for $5M. Total coverage = $6M
Why is it important?
In cases where an umbrella insurance is not purchased, causing an accident can result in your surrender of all your material goods in order to assess their value.
Most often the property can be taken away is the home you own, cars and boating goods. Other property like jewelry and assets may also be part of the pot a person in a lawsuit can claim.
Additionally, a portion of your salary may need to go to any successful claimants for many years, if not for the rest of your life.
9/9/2018

11. How The Cost Of Life Insurance Is Determined
Mortality – Life insurance is based on the sharing of the risk of death by a large group of people. Mortality tables are used to give the company a basic estimate of how much money it will need to pay for death claims each year. By using a mortality table a life insurer can determine the average life expectancy for each age group.
Interest –Companies invest your premiums in bonds, stocks, mortgages, real estate, etc., and assume they will earn a certain rate of interest on these invested funds.
Expense –The company estimates such expenses as salaries, agents’ compensation, rent, legal fees, postage, etc.
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12. Analyze Your Need For Life Insurance
One approach to determine how much life insurance one should carry is to analyze the various needs of the family in the event of the death of a wage earner.
Life insurance satisfies a number of these needs by providing a fund that can be used to:
Pay off an individual’s last debts such as medical bills and funeral expenses
Meet estate taxes and other expenses in settling an estate
Provide life income for the spouse
Pay off a mortgage
Pay for the children’s education
Provide funds for retirement
Provide an income for the policyholder’s spouse to give the family time to readjust to a new standard of living
Draw interest to provide funds for some special purpose
Provide a monthly income until the children are grown and out of school
9/9/2018

13. Life Insurance – Everybody is Accepted but is Everybody Paid?
A frequent claim in life insurance advertisements is that no applicants will be turned down. However, this claim does not necessarily mean that benefits will be paid if that person should die.
For example, if a man knows that he is on his deathbed, says nothing, and enters into a life insurance contract, chances are the benefits will not be paid out if he dies shortly thereafter.
This is because remaining silent about a terminal health condition is considered a misrepresentation on behalf of the individual.
Had he revealed this information, the man on his deathbed may have only been eligible for a small insurance payout. Misrepresentation can work both ways, and as an individual entering into a contract, you have responsibilities to the person you are contracting with.
9/9/2018

14. Insurance Do you drive a car?
Do you have anything valuable that you want protected?
If so, do you have insurance?
Who pays for it?
What coverage do you have?
Do you understand their “policy rights”?
Why is it important?
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15. What is a Deductible?
A _____________________ is a clause in your insurance policy that states you will pay a specific amount of a claim before the company pays.
The ______________ your deductible, the ________________ your premium.
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16. Automobile Insurance Financial responsibility law
40 states have one
Utah limits are 25/50/15
Requires you to carry certain minimum coverage if you damage someone’s person or property

17. Car Insurance Coverage's
_______________________. This pays for damage to your car if it rolls over or collides with something.
__________________. Covers the insured and/or family members when occupying a vehicle.
__________________. This pays for damage to your car resulting from causes other than collision, such as fire, theft and crashes with deer.
___________________. This pays what you would be legally entitled to collect for injuries caused by an uninsured driver.
________________. This pays for the cost of help when your car is disabled on the road. It includes towing charges and other emergency services.
_________________. Pays for renting a car while yours is being repaired.
9/9/2018

18. Automobile Insurance LOSSES COVERED: Liability Medical
Uninsured/underinsured
Physical damage
Other
LOSSES COVERED:

19. Auto Liability Coverage
property damage
liability
bodily injury liability

20. Auto Insurance Coverages
Bodily injury coverages
Bodily injury liability - covers people in other cars
Medical payments - covers people in your car

21. Auto Insurance Coverages
(continued)
Uninsured motorist
Your vehicle is hit by one of the many people who don’t have car insurance
Underinsured motorist
Your car is hit by a person who doesn’t have enough insurance to cover the damage they did to you and your car

22. Property Damage Liability Coverage
Covers damage to others person’s car when you are at fault
during a snow storm you might accidentally slide your vehicle into a neighbor’s mailbox    

23. Collision Coverage
When your car is in an accident, collision insurance pays for damage to your automobile, regardless of who is at fault. However, if you are not at fault they will try and collect from the other driver’s property damage liability first.

24. Comprehensive Physical Damage
Covers damage to your car that is not caused by a collision, such as
theft
vandalism
glass breakage
hail, sand, or wind storm
your car rolls downhill into a tree

25. No Fault Coverage.
No-fault does not mean that people believe no one is at fault in an accident.
Most accidents could be avoided; but trying to figure out who caused the accident— or how much the various persons in the accident contributed to it—often results in a lawsuit. Court cases take up a lot of time and payments often are delayed while decisions are being made.
_______________________________allows claims to be paid quickly. The payments made generally do not depend upon who is “at-fault” in the accident or how much they are at fault.
9/9/2018

26. Auto Insurance Premium Factors
Automobile type
year, make and model
Rating territory
accident, theft, and vandalism rates
Driver classification
age, sex, marital status
driving record
Assigned risk pool

27. Other Property/Liability Loss Exposures
Floater policies
Antique/specialty cars
Professional liability
Comprehensive personal liability
Umbrella liability

28. To Lower Your Auto Premium
Find out how much it will cost to insure a car before you buy it
Compare companies
Have larger deductibles
Look for discounts
non-smoker
good driving record
airbags
car alarm or other security