1. Do Now 1.List 5 risks that a typical person faces everyday. 2.List 3 kinds of insurance you have heard of.

2. Risk The chance of loss from some kind of danger We ALL face risk, EVERYDAY!  For example: Getting into a car accident Losing your wallet/purse Getting caught “cheating” on a test

3. ?AVOIDNIGHTDRIVING ALWAYSWEARSEATBELTS? ? ? ?OBEYSPEEDLIMITS MANAGING LOSS FROM INJURY INJURY IN A CARACCIDENT 6-C

4. Avoid it Reduce it Share it (transfer it) Managing the Possibility of Loss Accept it 6-D

5. “Sharing” the Risk Get insurance! - A way to guarantee your financial protection against various risks You will get an insurance policy when you pay for insurance Insurance policy- A written contract detailing what an insurance company will cover, how much IT will pay, and how much YOU will pay

6. Insurance, cont. You must PAY for insurance! This bill is called the insurance premium Insurance premium- The amount you pay for an insurance policy Factors that may affect how much you pay:  Age, marital status, where you live, credit score

7. A few more definitions… Coverage limit- the maximum amount the insurance company will pay if you file a claim  It can vary from 1,000’s – millions!  The HIGHER the coverage limit, the MORE you pay. Deductible- The amount of loss a person must pay out of your own pocket before the insurance company will step in and pay the rest  This also varies. It can be from $100 - $1000  The HIGHER the deductible you have, the LESS you pay in your premium (bill)

8. Auto (car) Insurance Very expensive for teenagers– In the first year of driving, one in five 16-year-old drivers has an accident! In the state of Michigan, you MUST have auto insurance to drive. It is the law! Your auto insurance premium (your bill) is based on the type of coverage and your driving track record.

9. Factors Affecting Automobile Insurance Costs Your age Make of car Marital status Do you take the car to work? If you’re a good student Gender Where you live How much you use the car Credit rating Driver’s education Driving record Type of car 6-F

10. Types of auto coverage General liability- Covers damage you cause to other people’s property and bodily injuries you cause to people OUTSIDE of your car. Medical Payments- Covers bodily injury expenses to you and your passengers, and any injuries you receive because of a car (example:getting hit by a car riding a bike)

11. Types of auto coverage Collision- Covers repairs for damage you cause to your car caused by an accident Comprehensive- This covers fire damage, break-ins, vandalism, theft, natural disaster damage (basically everything is covered except an actual collision)

12. Types of auto coverage, cont. Uninsured motorist- This covers your lost wages and medical expenses if you are in an accident with someone who doesn’t have insurance Underinsured motorist- This covers you when the cost of repairs from an accident caused by another driver exceeds his or her coverage limit.

13. 5 other common types of insurance 1.Health (medical) ins.-pays medical bills 2.Property ins.-protects your possessions 3.Life ins.- provides financial support for the people who depend on you financially in the event of your death (a young married couple with kids MOST needs life insurance) 4.Disability ins.- pays your income when an illness or injury prevents you from working for several works or even years 5.Liability ins.- protects you if you are sued

14. 5 other common types of insurance, cont. The two most important types of insurance you need at a young age are:  Health insurance &  Auto insurance The two types of insurance most employers provide are:  Health (medical) insurance &  Disability insurance

15. You can insure just about anything! Boat insurance Travel insurance Wedding insurance Malpractice insurance Errors and omissions insurance Pet health insurance Kidnap and ransom insurance

16. Insurance coverage If you don’t have enough insurance you may:  Not meet your long- term financial goals  Not be able to have a car  Have a poor credit rating  Not be able to stick with your budget

17. Assignment 1.List 10 risks a student might face in a typical day (could be physical, financial, social, etc.). Examples a student runs the risk of choking when eating breakfast. 2.For EACH of the 10 risks, brainstorm 3 practical actions you can take to lower your chance of loss from that risk.

18. For example Risk: getting into a car accident on the way to school Actions to reduce risk: walk, wear a seatbelt, obey speed limit