What are personal, property and liability risks types of?
pure or insurable
What is an example of risk avoidance?
Avoiding a robbery by staying away from high risk areas.
What is an example of risk reduction?
You can decrease the likelihood of an injury in an auto accident by wearing a seatbelt.
What are the four steps to planning an insurance program?
1. Set Insurance Goals
2. Develop a Plan to Reach Goals
3. Put Your Plan into Action
4. Review Plan (every 2-3 years)
What are homeowner insurance policy coverage for?
building or property, additional living expenses, personal property and liability, and specialized coverage
- credit card fraud, forgery, counterfeit money
- removing damaged property
- temp. repairs
- fire dept. charges
What does personal liability coverage cover?
- friends, guest, or babysitter getting hurt
- damage to next door neighbor's roof
- antique lamp broken by your children at your neighbors house while playing
Does homeowner's insurance cover losses from floods or earthquakes?
No
What are the two types of renter's insurance?
The Broad Form- coverers personal property against perils
The Comprehensive Form- protects personal property against ALL perils
What should renter's insurance cover?
- the actual cash value of your loss
- fully covers all personal property at home
How many Home Insurance Policy Forms are there?
6 forms- (HO-#)
basic form- (HO-1)- protects against perils
broad form- (HO-2)- wider range of perils (ice or snow)
special form- (HO-3)- covers all basic and broad forms
tenant's form- (HO-4)-protects personal property of renters
comprehensive form-(HO-5
What's the percentage of a home vs. personal belongings covered through homeowner's policies?
80% vs. 55%-75%
What are the two types of base claim settlements?
Actual Cash Value (ACV) or Replacement Value
How to decide how much home insurance you need...
- replacement value of the home (severe weather)
- value of the contents
- liability coverage desired
- protection for items such as jewelry, furs, cameras, silverware, or antiques
What are the 4 ways to control risk?
avoid, reduce, assume, and shift
What's relative value of risk?
Total Amount at Stake/ Wealth
Large Loss Principle
serious loss exposures receive priority over less serious loss.
- dont risk or pay more than you can afford
What is the purpose of co-insurance?
to prevent under- insurance of home or business