Professional Documents
Culture Documents
Objectives
A. Understand the key areas of Auto Insurance and how to keep your costs down B. Understand the key areas of Homeowners Insurance and how to reduce your costs C. Understand the key areas of Liability Insurance
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Boone, David Kurtz, and Douglas Hearth, Planning Your Future, 3rd ed., Thompson Southwestern, United States, p.275.
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Standard Exclusions
What are exclusions?
Contract clauses which limit the insurance companys liability in specific situations or events Your insurance may not pay up if: There is intentional injury or damage There was use of the vehicle without permission The vehicle has less than four wheels Someone elses vehicle was provided on a regular basis Its your automobile, but not listed on your policy You were carrying passengers for a fee You were driving in a race or speed contest
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No-Fault Insurance
What is no-fault insurance?
No fault insurance is insurance coverage that pays for each drivers own injuries, regardless of who caused the accident No-fault varies from state to state. Such policies are designed to promote faster reimbursement and to reduce litigation Where is no-fault insurance available? It is only available in no-fault states Utah is no-fault state
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1. Shop comparatively
Know what other insurance companies are charging for similar coverage from the same area and vehicle Check to see what discounts you can receive from having all your insurance from the same provider
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5. Drive defensively
Improve your driving record Dont get tickets, but if you do: Go to traffic school whenever possible to keep tickets off your record
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Questions
Any questions regarding auto insurance?
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Should you need to add additional coverage, a homeowners policy can be supplemented in a number of ways through specific endorsements: Inflation: This allows protection to increase with the increase in repair and rebuilding costs Floater Policies: These are policies that provide protection for valuable personal property over and above existing policy limits Flood, Earthquake and Terrorism Insurance: This provides protection in the event of a flood, earthquake, or terrorist activity
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2. Dont under-insure
Insure for the replacement cost of the dwelling Remember coinsurance and the 80% Rule Dwelling must be insured to within 80% of the replacement cost. Coinsurance requires you to pay for a portion of the loss if you dont carry adequate insurance If not insured at least 80%, in the event of the loss, you will receive the greater of: Actual cash value of the portion of the home lost Insurance Coverage x Value of Loss 80% of Replacement Cost
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3. Select a financially sound insurer with low comparative costs and stick with them
Shop aroundknowledge is power Utilize all discounts you can qualify for, including multiple policy discounts Check with www.ambest.com for your insurers record and financial position Dont switch carriers to save a few bucks. A claim within 6 months may get you dropped Dont make small claims. Too many can cause your policy to be dropped
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4. Get a CLUE (Comprehensive Loss Underwriting Exchange) report for both your home and your automobiles
Errors on your CLUE report and credit reports can boost premiums and cost you money Be careful that inquiries are not listed as actual Get your one free CLUE report each year in compliance with the FACT Act. Review both for your home and auto policies
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Questions
Any questions regarding homeowners insurance?
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Questions
Any questions on personal liability coverage?
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Review of Objectives
A. Do you understand the key areas of Auto Insurance and how to keep your auto insurance costs down? B. Do you understand the key areas of Homeowners Insurance and how you can reduce your homeowners costs? C. Are you familiar with the key areas of Liability Insurance?
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Case Study #1
Data Larry has split-limit $100/300/50 automobile liability insurance. Several months ago Larry was in an accident in which he was found to be at fault. Four passengers were injured in the accident and were awarded $100,000 each because of Larrys negligence. Application How much of this judgment will Larrys insurance policy cover? What amount will Larry have to pay outof-pocket? Note: Larrys coverage is (A/B/D) 100/300/50. A=Liability: bodily injury liability per person. B=Medical: coverage per accident. D=Damage: collision or comprehensive coverage
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Case Study #2
Data Janet Tanner currently insures her home for 100% of its replacement value with an HO-2 policy. For Janice this works out to $280,000 in dwelling (A) coverage. Calculations What are the maximum dollar coverage amounts for parts B, C, and D of her HO-2 homeowners policy?
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Case Study #3
Data Kelly has a personal property coverage with a $250 limit on currency; a $1,000 limit on jewelry; and a $2,500 limit on gold, silver, and pewter. She does not have a personal property floater. Her deductible is $250. Application a. If $500 cash, $2,500 of jewelry, and $1,500 of silverware were stolen from their home, what amount of loss would be covered by her homeowners policy ($4,500 total)? B. How much will she have to pay on the claim?
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Cash
$250
$250
$500
Jewelry
Silverware Totals
$1,000
$1,500 $2,750 - $250 deductible = $2,500
$1,500
$0 $1,750 + $250 deductible = $2,000
$2,500
$1,500 $4,500
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Case Study #4
Data Catherine called her insurance agent to learn how to reduce her $1,000 annual homeowners insurance premium. The agent suggested increasing her current $250 deductible on her policy to $500. This would result in a 10% premium savings. Her agent also indicated that she would increase her deductible to $1,000 with an 18% savings, or $2,500 with a 25% savings. Calculations a. How much will Catherine save per year in premiums by choosing the new deductibles? b. What are the advantages & disadvantages of increasing her policy deductible?
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Case Study #5
Data Paul is confused about his umbrella policy. His insurance agent requires him to have $250/500/100 split insurance on each of his automobiles before they can be put under his umbrella policy. He also has to have a similar liability coverage for his home. Application What is the purpose of an umbrella policy? Does it pay before or after Pauls home or auto coverage?
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Case Study #6
Data
Bill was in an accident where he was found at fault. Assume all three persons were injured in the accident and their medical claims were the amount shown. Fill in the following form based on the example liability limits on the left of the page. Who is responsible for the remaining exposure?
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