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Insurance . Risk . Risk is the uncertainty about a situation’s outcome This can be an unpredictable event which leads to loss or damage. Insurance Terminology .
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Risk • Risk is the uncertainty about a situation’s outcome • This can be an unpredictable event which leads to loss or damage
Insurance Terminology • Insurance is an arrangement between an individual (consumer) and an insurer (insurance company) to protect the individual against risk • A policy is a contract between the individual and the insurer specifying the terms of the insurance arrangements
Insurance Terminology • A policyholder is a consumer who purchases the policy • A premium is a fee paid to the insurer to be covered under specified terms • A deductible is the amount paid out of pocket by the policy holder for the initial portion of a loss before the insurance coverage begins
Types of Insurance • Types of insurance can include: • Automobile • Health • Life • Disability • Homeowners/Renters
Automobile Insurance • Automobile Insurance is an arrangement between an individual (consumer) and insurer (insurance company) to protect the individual against risk from automobile accidents
Automobile Insurance Types • There are four types of coverage for Automobile Insurance: • Liability insurance • Medical payment insurance • Uninsured or underinsured motorists insurance • Physical damage insurance • Collision • Comprehensive
Liability Insurance • Liability Insurance covers the insured if injuries or damages are caused to other people or their property • It is the minimum amount of insurance required by law for automobiles
Medical Payment insurance • Medical Payment Insurance covers injuries sustained by the policyholder of the insured vehicle or any passenger regardless of fault • It also covers policyholder and/or family members injured as passengers in another’s vehicle or if injured as a pedestrian
Uninsured motorists insurance • Uninsured or Underinsured Motorists Insurance covers injury or damage to the driver, passengers, or the vehicle caused by a driver with insufficient insurance
Physical damage insurance • Physical Damage Insurance covers damages caused to the vehicle • Collision – covers a collision with another object, car, or from a rollover • Comprehensive – covers all physical damage losses except collision and other specified losses
http://www.forbes.com/sites/theapothecary/2013/12/30/how-many-healthy-people-are-signing-up-for-obamacare-the-white-house-wont-say/http://www.forbes.com/sites/theapothecary/2013/12/30/how-many-healthy-people-are-signing-up-for-obamacare-the-white-house-wont-say/ Health Insurance ObamaCare/Affordable Care Act—click link above • In 2012 there were approximately 48 million Americans or 15.4percent of the population without health insurance(http://www.census.gov/newsroom/releases/archives/income_wealth/cb13-165.html) • Health insurance provides protection against financial losses resulting from injury, illness, and disability • Health insurance types include hospitalization, surgery, prescriptions, doctor’s visits,dental, vision, long-term care, or other major expenditures • Health insurance may be purchased by the individual or through their employer • Children can be included on their parents’ health insurance until the age of 26
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 • The contract is a policy which states the amount to be paid to the beneficiary upon the insured person’s death
Life Insurance • A beneficiary is the recipient of any policy proceeds if the insured person dies • A dependent is a person who relies on someone else financially
What Covers This Risk? • You hit and injure a pedestrian in a crosswalk Automobile—Liability!
What Covers This Risk? • After losing her husband to a heart attack, the wife is left alone to care for 2 children Life!
What Covers This Risk? • You need a cast after breaking an ankle while roller-blading Health!
Disability Insurance • Disability Insurance replaces a portion of one’s income if they become unable to work due to illness or injury
Homeowner’s/Renter’s Insurance • Homeowner’s Insurance combines property and liability insurance into one policy to protect a home from damage costs due to perils. • A peril is an event which can cause a financial loss like fire, falling trees, lightning and others
Property Insurance • 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 • Homeowner’s insurance should cover the replacement cost which will pay to rebuild the home if it is completely destroyed
Renter’s Insurance • Renter’s Insurance protects the insured from loss of the contents of the dwelling rather than the dwelling itself • Renter’s insurance may be provided by a parent or guardian while an individual is still a full time student or under the age of 18 • However, each policy is different and should be inspected by the policy holder
What Covers This Risk? • Your apartment is broken into and your computer is stolen Renters!
What Covers This Risk? • You are injured in an automobile accident and are unable to work for 2 months Disability!
What Covers This Risk? • Your garage was destroyed by a fire which started by a lightning bolt hitting your home Homeowners—Property!
What Covers This Risk? Your car inside the garage destroyed by a fire which started by a lightning bolt hitting your home Homeowners—Property or Comprehensive Automobile!
What Covers This Risk? • Sick at home from food poisoning after eating a carnival corndog Nothing!
What Covers This Risk? • You have brake failure. You hit a telephone pole and cause damage to the front of the car Automobile—Collision!
What Covers This Risk? • You get pulled over and receive a speeding ticket on your way to the mall Nothing!
What Covers This Risk? • A daughter, who is financially responsible for her mother’s nursing home bills, dies from an undetected heart defect Life!
What Covers This Risk? • A doctor diagnoses a child with tonsillitis during a visit to a clinic Health!
What Covers This Risk? You are hit by a car while crossing the street and that person has no insurance. Automobile—Uninsured/Underinsured or Medical Payments!
