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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Unit 6 - Insurance:Unit 6 - Insurance:Protecting What You HaveProtecting What You Have
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Objectives
• Identity ways to manage risk
• Describe how insurance is use to protect against financial loss
• Explain the features and protection related to car insurance
• Examine how insurance needs vary from person to person because of lifestyle and life situation
• Access how insurance fits into financial planning
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Success is defined by . . . • You identify lifestyle characteristics that will affect you insurance
needs now and three years from now• You outline your insurance needs related to your current lifestyle• You outline you potential insurance needs related to your
predicted lifestyle 3 years from now• You estimate the monthly or annual costs of each type of
insurance• You describe how your insurance needs will affect your budget• You list at least 3 specific ways you can reduce your insurance
costs• You describe specific ways you can avoid, reduce, accept and/or
share the risk of personal and financial loss• You provide rationale for choosing insurance and other risk
management options
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
ExposureExposure RiskRisk Potential LossPotential Loss
Accident or Accident or IllnessIllness
PropertyPropertyOwnershipOwnership
LiabilityLiability
Loss of income from Loss of income from inability to work; inability to work; uninsured medical bills; uninsured medical bills; deathdeath
Your property is Your property is damaged, destroyed, damaged, destroyed, lost, or stolenlost, or stolen
You are found liable for You are found liable for injuries to other people injuries to other people or damages to their or damages to their propertyproperty
UNLIMITEDUNLIMITED
UNLIMITEDUNLIMITED
Amount needed Amount needed to replace your to replace your propertyproperty
Common Exposures to LossCommon Exposures to Loss
6-A6-A
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Avoid itAvoid it
Share itShare it
Alternatives forAlternatives forManaging the Possibility of LossManaging the Possibility of Loss
Accept itAccept it
6-B6-B
Reduce itReduce it
Share itShare it
??AVOIDAVOIDNIGHTNIGHT
DRIVINGDRIVING
ALWAYSALWAYSWEARWEAR
SEATBELTSSEATBELTS????
??
??OBEYOBEY
SPEEDSPEEDLIMITSLIMITS
MA
NA
GIN
G L
OS
SM
AN
AG
ING
LO
SS F
RO
M IN
JUR
YF
RO
M IN
JUR
Y
INJURYINJURYIN AIN ACARCAR
ACCIDENTACCIDENT
6-C6-C
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Avoid itAvoid itReduce itReduce it
Share itShare it
Managing the Possibility of LossManaging the Possibility of Loss
Accept itAccept it6-D6-D
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
My Personal Financial Risk ExposuresMy Personal Financial Risk Exposures
Exposure Risk How to Evaluate Potential Loss
How much would I lose if I couldn’t work for:1 week?1 month?1 year?
UnlimitedUnlimited
Acc
iden
t or
Illne
ss
LostIncome
Death Permanent UnlimitedUnlimited
MedicalBills
What is the most this could cost me? UnlimitedUnlimited
6-E-16-E-1
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My Personal Financial Risk My Personal Financial Risk ExposuresExposures
Exposure Risk How to Evaluate Potential Loss
Liability
Liability for injuries
to other people or damages to their
property
What is the most this could cost me? UnlimitedUnlimited
Property Owner-
ship
Damaged, destroyed
lost, or stolen
This will be the total dollar amount for the particular item(s) from your Personal Property Inventory (Part A)
$ _______
6-E-26-E-2
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Factors Affecting Automobile Factors Affecting Automobile Insurance CostsInsurance Costs
Your ageYour age
Make of carMake of car
Marital statusMarital status
Do you take the car to work?Do you take the car to work?
If you’re a good studentIf you’re a good student
GenderGenderWhere you liveWhere you live
How much How much you use the you use the
carcarCredit ratingCredit rating
Driver’s educationDriver’s education
Driving recordDriving record
Type of carType of car
6-F6-F
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Auto Insurance CoverageSuggested Minimums
Coverage Type Suggested Minimum Coverage
Liability
Medical Payments
Uninsured / Underinsured
Motorist
$100,000 per person $300,000 per accident
$100,000 per person $300,000 per accident
$10,000 per person
6-G6-G
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Auto Insurance Coverages
A. LiabilityBodily injury or property damages that you are responsible for because of an
accident involving your car
B. Medical Payments
Medical and/or funeral expenses for you, members of your family, and
other persons injured in an accident while in your vehicle. Also covers your
family members as pedestrians if struck by an auto.
Policy Section What It CoversSuggested Minimum Coverage
6-H-16-H-1
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Auto Insurance Coverages
Bodily InjuryYour injuries caused by an uninsured,
hit-and-run, or underinsured driver.
PropertyDamages to your vehicle caused by
uninsured or underinsured driver
C. Underinsured and underinsured motorists
Policy Section What It CoversSuggested Minimum Coverage
6-H-26-H-2
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Comparing Costs of Auto Insurance
6-I6-I
COVERAGES LIMITS YOU WANT
Com
pany 1
Com
pany 3
Com
pany 2
A. Liability1. Bodily Injury
2. Property Damage
B. Medical Payments
C. Uninsured & Underinsured Motorists
$ ____ per person$ ____ per accident$ ____ per accident
A. Damage to your car1. Collision2. Other than collision
loss (comprehensive)
$ ____ per person
$ ____ amount
$ ____ Deductible$ ____ Deductible
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
How to Save Money on InsuranceHow to Save Money on Insurance• Shop at least three places; compare rates Shop at least three places; compare rates
and policies; ask about discounts and and policies; ask about discounts and special rates.special rates.
• Read sources of information such as Read sources of information such as Consumer ReportsConsumer Reports®®..
• Purchase more than one type of insurance Purchase more than one type of insurance from the same company; insure all cars from the same company; insure all cars with the same company.with the same company.
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
How to Save Money on InsuranceHow to Save Money on Insurance• Choose the right car.Choose the right car.
• Don’t smoke.Don’t smoke.
• Select a higher deductible.Select a higher deductible.
• Carefully consider before adding riders or Carefully consider before adding riders or floaters.floaters.
• Have a good driving record & good grades Have a good driving record & good grades (“B” or better).(“B” or better).
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
How to Save Money on Insurance• Ask about discounts.
• Eliminate collision and comprehensive coverage if car is older.
• Reduce your daily driving.
• Drive defensively.
• Avoid theft and vandalism.
• Avoid filing excessive claims.
• Keep tabs on credit.
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Other Types of Insurance
• Health Insurance– Pays medical bills when you or your family get sick or injured
• Property Insurance– Protects your “stuff” such as electronics, furniture etc
• Life Insurance– Provides financial support for those that depend on you if you die
• Disability Insurance– Protects your earnings if you cannot work for a time period (weeks to
years)
• Liability Insurance– Protects you in case you are legally responsible for injuring someone
or damaging someone’s property
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit 6 – Your Money: Keeping it Safe and Secure
Still More Types of Insurance
• Boat• Travel• Wedding• Malpractice• Errors and Omissions• Pet Health• Kidnap and Ranson
• Bottom line – you can insure almost anything