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Insurance
By

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Risk

Risk is the uncertainty about a situations outcome

This can be unpredictable events which lead to loss or damage

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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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

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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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

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Types of Insurance

Types of insurance can include:

Automobile Health Life Disability Homeowners/Renters

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Automobile Insurance

Automobile Insurance is an arrangement between an individual (consumer) and insurer (insurance company) to protect the individual against risk from automobile accidents

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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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
Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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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

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Medical Payment insurance

Medical Payment Insurance covers injuries sustained by the driver of the insured vehicle or any passenger regardless of fault
It also covers family members injured as passengers or if injured as a pedestrian

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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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

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.10.1.G1

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

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.10.1.G1

Health Insurance
In

2005 there were nearly 47 million Americans or 16 percent of the population without health insurance
(http://www.nchc.org/facts/coverage.shtml )

Health

insurance provides protection against financial losses resulting from injury, illness, and disability

Health insurance may cover hospital, surgical, dental, vision, long-term care, prescription, or other major expenditures Health insurance may be purchased by
Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Life Insurance
Life insurance is a contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insureds death The contract is a policy which states the amount to be paid to the beneficiary upon the insured persons death

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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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

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What Covers This Risk?

You hit and injure a pedestrian in a crosswalk

Automobile!

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What Covers This Risk?

After losing her husband to a heart attack, the wife is left alone to care for 2 children Life!

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What Covers This Risk?

You need a cast after breaking an ankle while roller-blading Health!

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Disability Insurance

Disability Insurance replaces a portion of ones income if they become unable to work due to illness or injury

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Homeowners/Renters Insurance
Homeowners 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

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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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 others financial losses Homeowners insurance should cover the replacement cost which will pay to rebuild the home if it is completely destroyed

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Renters Insurance
Renters Insurance protects the insured from loss of the contents of the dwelling rather than the dwelling itself Renters 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
Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What Covers This Risk?

You apartment is broken into and your computer is stolen Renters!

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What Covers This Risk?

You are injured in an automobile accident and are unable to work for 2 months Disability!

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What Covers This Risk?

Your garage was destroyed by a fire which started by a lightning bolt hitting your home Homeowners!

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What Covers This Risk?

Sick at home from food poisoning after eating a Outside stuff.

Nothing!

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What Covers This Risk?

You have brake failure. You hit a telephone pole and cause damage to the front of the car
Automobile!

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Conclusion

Review the following terms and concepts:

Risk Insurance Policy Policyholder Premium Deductible Types of Insurance

Family Economics & Financial Education Updated April 2008 Insurance Unit Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona