InsuranceInsurancePersonal Financial Management

Insurance and Risk Insurance and Risk ManagementManagement

Introduction Activity: With a partner.

Read p. 501 Explore Insurance Options.

1. Create a list of property he owns and determine an approximate replacement value

2. Choose three companies that offer renters insurance and compare what each company covers and the costs of coverage

3. Use a spreadsheet to compare your findings.

4. What company did you choose? ..why??!?!

AssignmentAssignment

Read p. 503-510

Answer questions 1-4 on p. 511

Home and Property Home and Property InsuranceInsurance

Homeowners Homeowners InsuranceInsurance

Coverage that provides protection for your residence and its associated financial risks, such as damage to personal property and injuries to others.

Building and Other Building and Other StructuresStructures

Covered under a homeowners' policy

detached structures on your property, such as a garage or tool shed

Household InventoriesHousehold InventoriesIf something happens to your personal property, you must provide how much it was worth.

List or other documentation of personal belongings, with purchase dates and cost information.

Form obtained from insurance agent

Additional Property Additional Property InsuranceInsurance

Valuable items may need added protection

Examples: jewelry, computers, musical instruments

Personal Property Floater - additional property insurance that covers the damage or loss of a specific item of high value.

Specific description and value proof

Personal Liability and Personal Liability and Related CoveragesRelated Coverages

Amounts of Coverage

Specialized Coverages

Amounts of CoverageAmounts of CoverageBasic homeowners policies cover $100,000

Umbrella policy - supplements basic personal liability coverage

Extended liability policies are useful for the wealthy and business - sold in the amounts of $1 million or more

Medical Payments Coverage - pays the costs of minor accidental injuries to visitors on your property.

Specialized CoverageSpecialized CoverageFloods or earthquakes – not part of homeowners policy

May be mandatory where you purchase your home

National Flood Insurance Program

Actual Cash ValueActual Cash Value

The payment you receive is based on the replacement cost of an item minus depreciation.

Depreciation - loss of value of an item as it gets older

Replacement ValueReplacement Value

You receive the full cost of repairing or replacing an item.

Depreciation is not considered when settling the claim.

More expensive coverage than actual cash value