Insurance

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Insurance

• Auto and Homeowners

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Are You Ready For The Road?
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History of Insurance
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Did You Know

• Teen drivers are 10 times more likely to be
  involved in crash during first year of driving
• Teens have highest chance of having fatal crash
  within first six months of getting drivers
  license.
• 16-year-olds have higher crash rates than drivers
  of any other age.
• Males are twice as likely as females to be killed
  in crash while theyre teenagers.
• 55 of teens killed in car crashes werent using
  seat belts.
• 31 of teens drivers were drinking alcohol at
  time of death.
• 53 of teen deaths in fatal accidents occurred on
  weekends

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Even a Minor accident can result in

• Damage to your car
• Damage to other cars involved
• Medical Bills
• Lost wages
• Pain and suffering
• Prosecution
• Legal Fees
• Fines

An accident will affect your insurance rate for
approximately 3 years!
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Insurance Introduction Worksheet

• Complete the hand out about auto insurance using
  the website provided
• Will discuss once completed and before discussion
  on insurance
• Purpose Give a brief oversight of topic!

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What Is Insurance
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What Is Insurance

• Policy is contract between you and insurance
  company
• Pay premium in-exchange, insurance company
  promises to pay for specific car-related
  financial losses during term of policy.
• Risk Management
• Limiting possible losses to amounts can handle
• Purchase insurance
• manage risk of financial loss from illness,
  injury or damage
• Premium amount paid for coverage
• Low risks will be charged a lower premium
• High risks will be charged a higher premium

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• Policy legal contract when buy insurance
• You are policyholder
• Claim File when have loss
• Formal request for payment

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Shared Risk diversifying

• Insurance Company will diversify
• Sell policies to thousands of people
• Each pay premium thats small compared to
  potential loss
• EX car premium 300 per year but wreck,
  insurance may pay 12,000 to replace it
• Transfer funds from large group to only few who
  suffer loss
• Shared Risk no single person bear burden of
  large financial loss

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Agents - Characteristics

• Ability to explain policy
• Quality of advice about amount and kinds of
  coverage to buy
• Availability
• Helpfulness in claims process
• Speed in getting claims paid
• Overall friendly, cooperative nature
• Agent earns 2-4 of premiums paid

Shopping for Insurance web activity
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About Missouri Licensing
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MO Graduated Driver Licensing Requirements

• Obtain instructional permit at 15
• Pass written, road sign and vision tests
• Must have birth certificate, ss card, proof of
  address
• Must complete 40 hours driving and hold permit
  for at least 6 mo
• Must be accompanied by parent or guardian

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Intermediate License Requirements

• Valid for two years after
• Must be at least 18
• Pass vision and road sign test
• Accompanied by licensed driver 21 or older
• Prohibited from driving between hours of 1 am and
  5 am. (unless accompanied by licensed driver 21
  or older)

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Full License Holder Requirements

• Ages 18-21
• License stamped
• Under 21

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Do you know your signs?
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Texting While Driving Laws

• It is legal to operate vehicle while talking on
  cell phone
• Drivers under 21 prohibited from text messaging
• Ticket will cost up to 200 if caught texting

Use http//www.polleverywhere.com/ have you
ever texted while driving?
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(No Transcript)
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Texting and Driving is it worth it?
CRASH!
Close your eyes for 5 seconds

• Only you can decidejust remember NOTHING is THAT
  important that it has to be answered
  immediatelyif so, they will call you instead!

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Cost of Auto Insurance

• Risen due to
• New technology
• Computer controlled brake systems
• Make expensive to repair
• Medical technology
• Fuel efficient vehicles due to reduced car
  weight, hence, lighter therefore more injury and
  damage
• Suing

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Premiums and Statistics

• Use past statistics to predict if loss likely to
  occur
• Help estimate how much they have to pay to
  reimburse particular types of losses
• Stats used to set premiums
• Charge little more than expected loss profit

Choice Chance Control video 20 min.
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Factors Affecting Your Premium
RISK FACTOR HIGHER RISK LOWER RISK
Age Under 21 Over 21
Gender Male Female
Marital Status Single Married
Driving Record (points added to record due to violations) Tickets, Accidents (can increase premium 10)(too many pts. and may drop your coverage) Clean record
Rating Territory (Geographic location) Metropolitan, Urban Rural
Type of Vehicle SUV, sport 4-door sedan
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Other factors

• Claims number of
• Mileage
• No. miles drive to work per year (avg.
  12-15,000/yr)
• Credit Rating
• Car model
• Fixability (how easy to repair)
• Age of vehicle
• Mileage on vehicle
• What used for? (work, leisure)
• Grades of students

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High Risk Insurance
Use http//www.polleverywhere.com/ BAC Level

• SR22 Financial Responsibility Form
• BAC
• .08 Legally Intoxicated
• .02 Zero Tolerance Policy
• DUI or DWI or BAC
• 1st offense (8 pts on license)
• 500 fine 6 mo. Jail or license suspension 30
  days
• 2nd offense (12 pts on license)
• 1000 fine or license revoked 1-5 years
  interlock device substance abuse program
• 3rd offense
• Up to 5 years prison up to 5000 fines
  interlock, 10-year driver license suspension
  substance abuse program
• Raise insurance rates or cancel policy for 2-3
  years!

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(No Transcript)
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If You Are Under 21

• May loose license if
• Any alcohol-related traffic offense
• Possess or use alcohol/drugs while driving
• Alter, modify, misrepresent driver license
• Under 18 and second offense

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MIP (15-21 years)

• May suspend or revoke license if
• Purchase or attempt to purchase liquor
• Possess/consume any intoxicating liquor
• BAC of .02 or more
• 1st offense 30 day suspension
• 2nd offense 90 day
• 3rd offense 1 year
• To get license back
• Pay 45
• Attend Substance Abuse Traffic Offender Program

Show DVD (risk, resp, reality Scenario 2)
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Chemical Breathalyzer Test

• Required by MO law to take if requested by law
  enforcement officer

• If refuse
• License revoked for 1 year
• Officer will take license and administer 15-day
  permit. If court upholds arrest/revocation of
  license, driver serves any remaining time and
  must meet reinstatement requirements

Poster
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Reduce Your Premiums

• Clean driving record
• Ask about discounts
• Ex good student, accident free record,
  anti-theft devices, anti-lock brakes, multiple
  car, multiple line
• Safety features such as air bags anti-lock
  brakes
• Drivers Education course
• Simply living outside city limits save 5-10
• Drive a moderately priced car
• Age 18, 21, 25, married

Video Young Drivers 1040
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Lets Talk Premiums Deductibles
Do WS
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Types of Coverage

• Liability Coverage
• Bodily injury liability
• Property damage liability
• Medical Payments
• Uninsured/Underinsured Motorist
• Physical Damage
• Comprehensive
• Collision

MO required insurance shown in red
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Bodily Injury Liability

• Protects you against financial loss and cost of
  legal defense
• Coverage for any person(s) injured or killed in
  an accident where you are at fault
• Medical expenses, lost wages, pain and suffering
• Doesnt cover you OR damage to your vehicle

Liability Coverage
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Property Damage Liability

• Pays for damage you caused to another persons
  property/car
• Their car, a fence, house or any other property
  you damage
• Doesnt cover damages to your car!

Liability Coverage
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Liability Cont.

• Missouri REQUIRES liability coverage!
• Minimum coverage Missouri 25/50/10
• Each number represents 1,000 worth of coverage
  per accident
• Ex 25 25,000
• 1st No Max. amt. paid per person for bodily
  injury
• 2nd No. Max. amt. paid for ALL injuries per
  accident, regardless of how many people are hurt
• 3rd No. Max. amt. paid to cover property damage
  
• Recommended coverage 100/300/50

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Medical Payments

• Covers you and injured occupants of your car,
  regardless of fault
• Medical expenses (hospital, surgery, ambulance,
  prosthesis, dr visits
• Funeral expenses
• Coverage extends to you or family member when
  riding as passenger in someone elses vehicle or
  when struck on foot
• Pay up to specified amount as stated in policy
• PIP (personal injury protection) broader range of
  medical costs covers lost wages

Medical Payments
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Uninsured Motorist Coverage

• Covers expenses if at-fault driver is not insured
• Bodily injury
• Hit and run accident
• Death
• Pays for treatment of bodily injury sustained
  while in your car or as a pedestrian when hit by
  uninsured driver
• Doesnt cover damage to your vehicle or person
  uninsured
• Minimum coverage Missouri 25/50
• 1st No. bodily injury per person
• 2nd No. bodily injury per accident

Uninsured
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Underinsured Motorist Coverage

• Pays for damages caused by someone else who
  doesnt have adequate amount insurance
• Allows you to collect from your insurance company
  over what underinsured insurance cannot pay
• Uninsured and underinsured does NOT cover
  uninsured/underinsured person

Underinsured
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Comprehensive Coverage

• Pays for damage to your car caused by something
  other than collision
• Ex Perils such as earthquake, fire, rock, wind,
  hail, floods, hitting a deer, vandalism, theft,
  stolen
• Exclusions however
• See policy to determine
• Must pay a deductible

Physical Damage
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Collision Protection

• Must pay deductible
• Covers damage to your vehicle due to collision or
  roll over regardless of fault
• EX collision with another vehicle, tree, fire
  hydrant
• Insurance Co. only pay up to current market value
• EX Car worth 2500 and incur 4000 damage, only
  pay 2500
• Kelley Blue Book
• Smart Motorist

Physical Damage
DO Consumer Alert pg. 473
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How Much Insurance to Buy?

• Liability and Medical
• Recommended Missouri Coverage 100/300/50
• Collision and Comprehensive
• Depends
• Value of car
• Size of deductible
• Amt per accident paid out of pocket before
  insurance starts to pay
• Greater market value, larger premium pay
• Old car? May not be worth buying
• Full Coverage both liability coverage and
  coverage for damage to your vehicle

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What You Can Do To Reduce Risk?

• Use seatbelt
• Car front seat belt
• Reduce risk of fatality 45 moderate to critical
  injury by 50
• For trucks 60 and 65 respectively
• Observe Speed Limits
• Odds of death/serious injury double for every 10
  mph over 50 mph.
• Know Your Own Limits
• Concentrate on Driving
• Be Patient
• Dont Drink and Drive
• Get Good Grades

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Reading a Policy

• Basic parts of policy
• Declarations
• Coverage
• Exclusions
• Conditions
• Definitions
• Application document read and sign stating
  policy

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The Declarations Page

• Lists policy information such as
• Premiums
• Coverage
• Endorsements
• Deductibles
• Liability limits, etc.
• Insureds name and other info
• Auto description and VIN
• Lender if applicable
• Agent
• Endorsement Amendment to policy

Show declarations examples
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The Policy

• Details coverage of policy
• Exclusions
• State what is NOT covered by the policy
• Conditions
• Define insureds insurer's duties that must be
  fulfilled
• EX premiums payment schedule, filing steps,
  steps for resolving a claim
• Definitions
• Section explaining specific terms used
• You/Your refers to Named Insured
• We/Us refers to Insurance Company
• Family Members refers to resident of your
  household

Show examples
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Cancellations

• Insured or Insurer may cancel policy
• EX fail to pay premium, lose drivers license
• Prefer cancellation in writing
• Receive refund if applicable

Do workbook sec. 14.2
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Path of an Automobile Insurance Claim How to
file

1. Accident occurs
2. Make sure everyone ok
3. Call police and get police report
4. Exchange information
5. Get names of witnesses
6. Write down details of accident
7. Call your insurance company
8. Adjuster investigates
9. Obtain estimates
10. Repair vehicle

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How to File an Automobile Claim

• No-Fault Insurance
• Who pays for damage?
• When responsibility is unclear of who is at fault
  and whose insurance company should pay
• Under No-Fault, each company pays for own
  insurers losses, regardless of fault
• Helps to prevent lawsuits and speed up claims
  process

Path of Ins Claim WS
Path of Ins Claim SMART doc
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Insurance Fraud

• 20 of claims involves some type of fraud
• Old dent versus new dent
• Should pay for old on the new claim?
• Increase premiums people as whole have to pay

Smart Motorist Insurance Fraud Article
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Home Insurance Coverage

• Provides Coverage for
• Personal property
• Liability protection

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Types of Coverage

• Personal Property
• Covers damage to or loss of house and contents
• Physical structure of house but also unattached
  structures
• Garage, shed
• Interior of house
• Furniture, appliances, curtains, clothes

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Types of Coverage Cont.

• Exclusions
• Not covered in policy
• Coin collections, computer, jewelry, cash
• Need Rider
• Liability
• Cover bodily injury or damage you cause to others
  while on your property. Ex ladder/child
• Damage you do to someone elses property. Ex
  homerun/neighbor window
• Injury or damage to someone else or property when
  you arent home. Ex homerun at ballpark/hit
  spectator

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Umbrella Policy

• May have to purchase umbrella policy
• Provides additional liability beyond that
  included in policy
• Coverage limited
• Ex pay 200,000 - 500,000

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Special Risk

• Where live may be risk
• Ex Florida/hurricanes
• Ex California/earthquakes
• Ask agent
• Federal programs may help pay for this type
  insurance

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Homeowners Policy Forms

• Basic
• Broad
• Comprehensive
• Special
• Renters
• Condominium

Do Homeowners Policies WS
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Renters Insurance

• Provides about same coverage as Homeowners Ins.
  does
• Most of same property and liability risk as
  homeowner
• Someone falls in your apt. and break wrist
• You are responsible for medical expenses
• Doesnt cover structure or accidents outside of
  apt.
• Owner responsible for these
• Cheap 200 - 400 per year

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Cost of Homeowners Insurance

• Based on statistics from past experience
• Factors Affecting Premium
• Location
• Age of house
• Distance to fire station or hydrant

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Determining Value

• Value
• Be measured in financial terms
• Appraisal
• Experts determination of value of property
• Rider
• Special condition to policy that covers specific
  type of loss
• EX homeowners insurance not cover diamond ring
  (ring be a rider in policy)

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Determining Amount of Life and Health Insurance

• Greater amount coverage, higher premium
• Life expectancy
• Estimated avg. no. years remaining
• Based on gender, age, current health
• Health
• No. people needed for care and type of illness
• Calculate cost

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Role of Insurance in Economy

• Provides you security
• Businesses
• Banks wont give loan w/o homeowners insurance
• Physicians malpractice insurance

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Types of Insurance

• Property Insurance
• Protect due to stolen, damaged or destroyed
• Homes, cars, and valuable possessions
• Pay based upon
• Market Value amount item is worth now
• Replacement Value cost of replacing item,
  regardless of market value
• Ex couch

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Types of Insurance Continued

• Liability Insurance
• Sometimes your actions cause losses to others
• Ex damage or medical (injury)
• Protects you from losses you cause to others
• To stated maximum, will pay
• cost of damage
• medical expenses
• legal fees if sued

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Types of Insurance Continued

• Personal Insurance
• Protect you, spouse, children against loss due to
  
• Illness
• Disability
• Death
• Ex Health and Life Insurance or loss of income

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Reduce Your Premium

• Increase deductible
• Upgrade home
• Replace old pipes, wiring, metal siding etc.
• Install smoke detectors
• Install more security
• Dead bolts
• Security systems
• Special discounts
• Non smoker, member not work outside home

Homeowners Tip Video 1222
Do workbook sec. 14.3
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How to File a Homeowners Claim

• Home Inventory
• List items and value
• See example pg. 491
• Pictures or video of each room
• Have antiques, jewelry, etc, appraised
• Update
• Store info in bank safe deposit box!

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How to File a Claim Cont.

• Claims Process
• Cover damage ASAP to avoid more
• Ex hole in roof from storm
• Call agent
• Will send Adjuster
• Show inventory and check damage
• Receive check for damage

Student Inventory Activity pg.219 Ex.
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Which Type of Insurance Covers the Accident?

• Your car was damaged by vandals
• Comprehensive
• You are involved in an accident where the other
  driver didnt have coverage
• Uninsured motorist
• You and a passenger are injured
• Medical payments

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Insurance Coverage Cont.

• You damage someone elses property in an accident
  that is your fault
• Property Damage Liability
• You injure someone else in another vehicle in
  which the accident was your fault
• Bodily Injury Liability
• Your truck was damaged due to a collision with
  another vehicle regardless of fault
• Collision Protection

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• Path of Automobile Insurance Claim Review
• Factors Affecting Your Auto Premiums (slide 2)
• Corkboard.me Ways to reduce your auto premium
• Corkboard.me ways to reduce your homeowners
  premium