1. Chapter 25 Introduction to Risk Management
MYPF CHAPTER 25
13-SEPT-2001
Chapter 25 Introduction to Risk Management
What Is Insurance?
Risk Management
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2. Lesson 25.1 What Is Insurance?
Explain the concept of insurance.
Define basic insurance terminology and types of risk.
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3. Spreading the Risk
Insurance is a method for spreading individual risk among a large group of people to make losses more affordable for all.
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4. Insurance Terminology p. 607
Actuarial table
Actuary
Beneficiary
Benefits
Cash value
Claim
Coverage
Deductible
Exclusions
Face amount
Grace period
Hazard
Insurance agent
Insured
Loss
Peril
Proof of loss
Standard policy
Unearned premium
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5. Insurable Risks Personal risks Property risks
Are the chances of loss involving your income and standard of living.
Ex life, health and disability insurance
Property risks
The chances of loss or harm to personal or real property.
Ex home, and car insurance
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6. Insurable risk cont. Liability risks
Are the chances of loss that may occur when your errors or inappropriate actions result in bodily injury to someone else or damage to someone else property.
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7. Lesson 25.2 Risk Management
Discuss the risk-management process.
Explain how to create a risk-management plan.
Discuss ways to reduce the costs of insurance.
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8. Risk-Management Process
Step 1: Identify risks of loss
Pure risk
Speculative risk
Step 2: Assess seriousness of risks
Step 3: Handle risks
Risk avoidance
Risk reduction
Risk assumption
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9. Making a Risk-Management Plan
List identified risks.
List assessment of risks’ financial impact.
List techniques to manage each risk.
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10. Reducing Insurance Costs
Increase deductibles.
Purchase group insurance.
Consider payment options.
Look for discount opportunities.
Comparison shop.
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11. Chapter 26 Property and Liability Insurance
MYPF CHAPTER 26
13-SEPT-2001
Chapter 26 Property and Liability Insurance
Property Insurance
Automobile and Umbrella Insurance
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12. Lesson 26.1 Property Insurance
Explain the purpose of renter’s and homeowner’s insurance.
Describe fire, theft, and other forms of property insurance policies.
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13. Renter’s Insurance
Insurance that protests renters from Property risk and Liability risk.
Ex. Protects from Fire, theft and smoke. (property risk)
Ex. Protects from medical cost by guest.
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14. Homeowner’s Insurance
Insurance that protects property owners from property and liability risk.
How much coverage do you need?
Contents half
Physical damage coverage
Theft and vandalism coverage
Liability coverage
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15. Homeowner’s Policies
HO policies may be very basic or very broad. Package policies that include several types of coverage usually carry a lower premium.
HO-1 Basic Coverage
HO-2 Broad Form
HO-3 Special Form
HO-4 Renter’s
HO-5 Comprehensive
HO-6 Condominium Owner’s
HO-7 Older Homes
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16. Lesson 26.2 Automobile and Umbrella Insurance
Discuss common types of automobile insurance coverage.
Explain the concept of liability insurance and an umbrella policy.
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17. Warm up
1. why do young single drivers generally pay higher automobile insurance polices than do married drivers over 25?
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18. Automobile Insurance Cost of automobile insurance
Types of automobile insurance coverage
No-fault insurance
Assigned-risk policies
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19. Cost of Automobile Insurance
Model, style, and age of car
Driver classification
Location
Distance driven
Purpose of driving
Age and sex of other regular drivers of the car
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20. Types of Automobile Insurance Coverage
Liability coverage
Collision coverage
Comprehensive coverage
Liability+ collision + causes from other than collisions. Ex hail, fire, vandalism
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21. Types of Automobile Insurance Coverage cont.
Personal injury protection (PIP)
Pays for medical, hospital and funeral cost of the insured plus passengers and family regardless of fault.
Uninsured/underinsured motorist coverage
It pays for your injuries when the other driver is legally liable but unable to pay. Also covers you as a pedestrian.
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22. Umbrella Liability Insurance
Also called -catastrophe policy
Supplements your basic auto and property liability coverage
It would pay up to $1-2 million for the other person hurt due to your fault car accident, or property.
Ex. A person has a permanent injury. Medical covers $ UL would cover the rest up to the policy amount.
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23. Automobile Insurance No-fault insurance laws
Many states have passes no-fault insurance laws. These laws set up a system of compensation for auto accidents that does not require a legal determination of who was at fault.
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24. Automobile Insurance Assigned-risk policies
If you are declined or dropped from getting insurance. Every state has a assigned-risk pool that consist of people unable to obtain Automobile insurance. They assign them to different companies who HAVE to provide them with insurance. But will do so at a much higher cost due to risk.
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25. Activity
Answer the 16 questions in the book. P Not on the computer…use your book and notes for the answers.
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26. Chapter 27 Health and Life Insurance
MYPF CHAPTER 27
13-SEPT-2001
Chapter 27 Health and Life Insurance
Health Insurance
Disability and Life Insurance
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27. Lesson 27.1 Health Insurance
Describe group and individual health insurance plans.
Discuss common types of health insurance coverage and plans.
Explain Medicare and Medicaid coverage.
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28. Group and Individual Health Plans
Group policies
Group health insurance
Issued to a group.
Same coverage and set premium.
No physical exam
COBRA
Consolidated Omnibus Reconciliation Act.
Can continue coverage after leaving employment for a period of time (usually 18 months)
High Cost
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29. Group and Individual Health Plans
Coordination of benefits
Is a group health insurance provision that specifies how the insurer will share the cost when more than one policy covers a claim.
Individual policies
Premiums are usually higher and require a physical exam
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30. Types of Health Insurance Coverage
Basic health insurance
Covers medical, hospital, surgical costs
Major medical expense insurance
Coverage protection against the catastrophic expenses.
Dental and vision insurance
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31. Private Health Plans Unmanaged (traditional fee-for-service) plans
Allows employees to choose any Dr. and will be reimbursed up to certain amounts.
Managed-care plans
Preferred provider organization (PPO)
Health maintenance organization (HMO)
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32. Health Savings Accounts
Set aside money to pay medical expenses not paid by insurance.
Contributions are tax deductible.
Employer may contribute to account.
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33. Medicare and Medicaid
Medicare: Government-sponsored health insurance for people age 65 or older
Medicaid: Government-sponsored health insurance for people with low incomes and limited resources
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34. Disability Insurance Group disability insurance
Social security disability insurance
Workers’ compensation insurance
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35. Life Insurance Provisions of life insurance policies
Types of life insurance
Temporary life insurance
Permanent life insurance
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