1. Types of Insurance Essentials Economics 2015

2. Review: What is Insurance? Risk is the uncertainty about a situation’s outcome- may be an unpredictable event which leads to loss or damage Insurance is an arrangement between an individual (consumer) and an insurer (insurance company) to protect the individual against risk

3. Helps limit financial losses when an accident occurs Helps an individual/family be prepared for the unexpected Plays a large role in most financial management plans Review: Why is it important to have insurance?

4. Review: What is an Insurance Policy? A policy is a contract between the individual and the insurer specifying the terms of the insurance arrangements A premium is a fee paid to the insurer to be covered under specified terms outlined in the policy A deductible is the amount paid out of pocket by the policyholder for the initial portion of a loss before the insurance coverage begins- the deductible is stated in the policy A policyholder is a consumer who purchases the policy

5. Types of Insurance Automobile Health Life Disability Homeowners/ Renters *See Health Care PPT for Health Insurance Information

6. Automobile Insurance Automobile Insurance - arrangement between an individual (consumer) and insurer (insurance company) to protect the individual against risk from automobile accidents Liability insurance (min amount allowed; covers others you might hurt) Medical payment insurance Uninsured or underinsured motorists insurance Physical damage insurance Collision Comprehensive

7. What determines your premium: Your driving record Your auto insurance history Your marital status Your credit history Your car (make, model, year) How many miles you travel per year Where you regularly park your car Your gender; your age Automobile Insurance

8. Premiums by State

9. Average car Insurance by Age

10. Average car Insurance by Gender

11. Life Insurance Life insurance is a contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insured’s death A beneficiary is the recipient of any policy proceeds if the insured person dies Provides money for family members or dependents when a wage earner dies A dependent is a person who relies on someone else financially

12. Average costs (by age) Life Insurance

13. Disability Insurance Disability Insurance replaces a portion of one’s income if they become unable to work due to illness or injury Insurance typically pays between 60-70% of one’s full-time wage Factors such as the length or severity of a disability influence the percentage of income a person will receive

14. Cost: determined based on age, gender, and smoking Average monthly premium in US: Disability Insurance AgeMonthly Premium 30$37.84 35$45.16 40$54.85 45$63.72 50$70.55

15. Homeowner’s Insurance Homeowner’s Insurance - combines property and liability insurance into one policy to protect a home from damage costs due to perils Peril -an event which may cause a financial loss like fire, falling trees, lightning and others Property Insurance -protects the insured from financial losses due to destruction or damage to property or possessions Liability Insurance- protects the insured party from being held liable for other’s financial losses

16. Average cost of homeowner’s insurance in the US Average cost of homeowner’s insurance in the US Homeowner’s Insurance

17. Renter’s Insurance Renter’s Insurance protects the insured from loss of the contents of the dwelling rather than the dwelling itself Necessary because a landlord’s insurance policy on the dwelling does not cover the renter’s personal possessions Covers major perils, provides liability protection and provides for additional living expenses if the dwelling is rendered uninhabitable

18. Average cost in the US: $15 per month for $20,000 in coverage Renter’s Insurance