Common Mode Failure
a failure of a single event causes multiple failures in a system.
3 forms of a Loss
Financial, Physical, Material
indemnify
compensate for loss, damage, or injury; reimburse; repay
Indemnification
The insured is restored to his or her approximate financial position prior to the occurrence of the loss
claim
Request by insureds to pay for losses
insurance policy
a written contract between the insured and an insurance company that promises to pay for all or part of a loss
Reduce, avoid, ignore, transfer...
risk
risk
The probability and magnitude of loss, disaster, or other undesirable event
How does yung 0rri calculate risk
% (PROBABILITY) * $(MAGNITUDE)
Management
the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively
How is management used in insurance
to minimize, monitor or control the probability and/ or impact of unfortunate events
Comprehensive and collision coverage
covers theft, vandalism, hailstorms, stereos, damage to vehicle regardless of fault
Subrogation
Where one insurance company pursues claims against another insurance company
uninsured/ Under-insured
coverage covers medical payments property damage.. amounts vary by states
perils
sources of danger that result in loss (fire, storm, flood, theft, trees, vandalism.)
Home owners policies will
list exclusions to coverages... Earthquakes, floods
Renters Insurance
Protects you against loss of personal property, liability for a visitor's personal injury, and liability for negligent destruction of the rented premises.
Four Basic parts of the typical Homeowners Policy (not including liability)
Dwelling
detached structures
contents
loss of use
Moral Hazard
When the act of insuring an event increases the likelihood that the event will happen bcs they act more R3cklezz
Risk Mitigation
to moderate or lesson risk in someway
3 ways to mitigate risk
Avoid, reduce, transfer
Workers Compensation
A form of insurance paid by the employer providing cash benefits to workers injured or disabled in the course of employment. (not all states require to carry this)
OSHA
Occupational Safety and Health Administration, a government agency in the Department of Labor to maintain a safe and healthy work environment
health care insurance
when a company or the government covers all or part of the cost of health care that a family needs.
What do health care plans involve
Premiums, deductibles, copayments
Three basic types of Health care coverage
Free for service plan (FFS), Health maintenance Organization(H(o)MO,Jwalt)
Preferred Provider Orginization (PPO)
Free for service plan
share the cost of medical service w/ insurer (20/80)
Health Maintenance Organization (HMO)
Alternative means of health care in which people or their employers are charged a set amount and the HMO provides health care and covers hospital costs.
Preferred Provider Organization (PPO)
combines FFS and HMO plans where physicians and providers are listed in the PPo network, and plan members can visit any provider in network by paying a small copayment
Groupthink
the mode of thinking that occurs when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives (2008 finance crisis)
Insurability
The ability of an applicant to meet an insurer's underwriting requirements. Based on- Health, lifestyle, age
Automobile Insurance
Provides payments for both liability and property insurance on a vehicle
Factors to calculate risk and premiums
type of vehicle
driving record
age
gender
claims history
Property damage
the insured is at fault, covers damage to other vehicle + sometimes incidental property
Bodily injury
Insured is at fault, covers people in the other vehicle + sometimes the insurance vehicle
Deductable
this is the amount the patient is expected to pay before the insurance plan will begin paying
dwelling
the replacement cost to repair structure
detached structures
Garages, fences usually covered at 10 percent
contents
Covered at 50 - 70 percent
homeowners policy #s
Ho1- basic form (fire policy)
HO2- broad form (homeowners policy)
H03- exclusions coverage
H04 - renters policy
HO6- Condominium Policy
HO7- Manufactured/ mobile home
H08- Modified Coverage (historic housing)
FEMA
Federal Emergency Management Agency
Measure Intangibility?
Fermi solution: Method that helped estimate uncertain quantity and a basis for where uncertainty about a quantity originated
Supplemental Security Income (SSI)
A federal program established to provide assistance to elderly persons and persons with disabilities
Elimination Period
a clause in a disability insurance policy that specifies how soon after the disability the policy will begin to pay benefits
Total Disability
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.
Own-occupation Protection
extra coverage in a disability policy for those who have a highly specialized and highly paid job, such as a brain surgeon
Residual Disability
coverage that protects you when you are able to work part time but not full time
Presumptive Disability
When an individual experiences:
- loss of use of any two limbs;
- total and permanent blindness; and
- loss of speech and hearing.
Loss of income policy
For businesses to retain key employees, keep salaries
Business Personal Property
Includes machinery/equipment, inventory (finished goods, goods in process, raw materials), improvements & betterments; leased personal property, debris removal; property of others, valuable papers & records
Dealers blanket policy coverage
insurance for business w/ a large inventory of expensive items, such as a classic car dealership