Risk Management: Homeowners Insurance. Jean Lown Erin Pratt Beth Butterworth. What is RISK?. Uncertainty of any outcome Speculative Risk (stock market) Pure Risk (driving a car, owning a home). Financial Risk. Must have a dollar amount attached to it.
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Uncertainty of any outcome
Speculative Risk (stock market)
Pure Risk (driving a car, owning a home)
Must have a dollar amount attached to it
Answer: Pure Risk
Risk Management is the process of identifying and evaluating situations involving pure risk to determine and implement the appropriate means for its management
What is its purpose?
Peace of mind, to protect your assets
Why are insurance companies willing to cover you?
Law of large numbers
Who can get insurance?
Do not let a crisis become a financial burden
Prepared for Financial Planning for Women by Beth Butterworth
USU Family Finance student
#1 People over-insure themselves (too low a deductible) and thus spend much more on insurance than they should.
#2 People underinsure themselves and are in financial crisis after an uncontrolled event.
#1 Think ahead
#2 Be prepared