4.02 Activity 1 Insurance Matching Activity
Premium insurance policy exclusion deductible insured
Perils risk insurer loss claim
1. Ron has to work a part time job to pay his car insurance. The cost of his insurance is called a______.
2. John and Mar’s home caught fire and burned almost to the ground. This falls in the homeowner’s policy under the category of a______.
3. Joan bought homeowner’s insurance with a local insurance company. She soon received in the mail the ______, which contained her coverage limits, exclusions, deductible limits and other information about her coverage.
4. The large oak tree in Bill’s yard fell on to the roof of his garage. Bill called his insurance company to tell them of his loss. This is referred to as a______.
5. When the adjuster came to Bill’s house to look at the damage from the tree, he told Bill it was his responsibility to pay the first $1500.00 of the damage. This is called what in an insurance policy______?
6. Bill’s name is listed on his homeowner’s insurance policy as the______.
7. Bill’s insurance company is referred to in his policy as the______?
8. In poor Bill’s case, the tree falling on his garage is known as a ______
Because of the decline in the value of his garage until it was repaired.
9. Amanda has a provision in her insurance policy that eliminates coverage for specific risks or limited coverage. This is known as an ______.
10. One of the main ingredients of insurance is whenever there is uncertainty about the outcome, it I s known as a______.
4.02 Activity 2 Automobile Insurance-Matching
1.______Covers your vehicle for damage caused by impact with another vehicle or object or overturn of your vehicle
2.______Pays if you are struck by someone who does not have insurance.
3.______Pays for medical expenses for you.
4.______Provides protection when you are held legally responsible Coverage for Bodily Injury and Property Damage caused by an auto accident.
5.______This coverage is elective coverage by the insured that provides specific coverage for incidents requiring towing of the insured’s vehicle(s)
6.______Provides protection from theft, windstorm, hail, flood, falling objects, collision with a bird or animal.
7.______Pays for your coverage if you are in an accident and the other motorist has lower liability coverage than your coverage. Your coverage will pay the difference.
8.______Physical injury to or destruction of or loss of use of tangible property such as other vehicle, buildings, telephone poles, fences etc.
9.______Rental Coverage is covered under this section of an automobile policy
A-Comprehensive Coverage F-Property Damage Coverage
B-Miscellaneous Coverage G-Underinsured Insurance Motorist Coverage
C-Liability Coverage H-Uninsured Motorist Coverage
D-Collision Coverage
E-Medical Pay (med pay)
4.02 Activity 3-Automobile Insurance
Critical Thinking
1. John has a new truck that he likes to show off by driving fast sometimes. On one occasion, John lost control of the truck and struck a mailbox and a tree in a residential yard. There was $150.00 damage to the mailbox, $500.00 damage to the tree and $3000.00 damage to John’s truck. What coverage in John’s automobile policy would cover these damages? Be specific.
2. James was driving on I-85 when a large thunder storm started. There was nowhere for him to pull over from the weather and as a result there were large pieces of debris blowing across the highway and several struck the side of his vehicle. In addition it began to hail large golf ball size hailstones that cracked his windshield and made dozens of dents in his hood and the top of his vehicle. When he reported the loss to his insurance company, they told him the damage would be covered under what coverage in his automobile policy? Why was this damage covered under this particular coverage section?
3. John and Mary were on their way home from the store when their car stalled in the middle of an intersection. Although the intersection was well lit, a car going in the same direction struck the rear of their car. At the same time, another vehicle also struck their car in the front right side. Both John and Mary were injured from the collisions. The first vehicle driver had no insurance on his vehicle. The second vehicle did have insurance but only had the minimum amount of liability coverage required by the state. John and Mary were both injured severely and spent many weeks in the hospital causing both a large hospital bill and also missing work for many months. John and Mary did have full insurance coverage with medium high limits. What type of coverage from John and Mary’s insurance policy would provide insurance coverage for them in the case of the other vehicle driver’s insufficient coverage? Be specific and state the reason for your answer.
4.02 Activity 4 THE NEW TRUCK
David Simpson purchased a new truck and titled it in his name. City Bank loaned David money for the truck. City Bank is named on the title and kept the title to the vehicle. David went to National Insurance and paid to insure the vehicle. The agent at National gave David a paper to prove the truck was insured until the policy issued. One day, when the truck was parked at David’s work, vandals slashed the tires. David had the following coverage on the truck.
Bodily Injury Liability $ 100,000/300,000
Property Damage Liability $50,000
Uninsured/Underinsured $100,000/300,000
Medical Payments $2000
Collision with $500 Deductible
Comprehensive with $50 Deductible
1. What is the contract between National Insurance and David called?
2. David is what party to this contract?
3. National Insurance is what party to the contract?
4. What is the paper that David received from National?
5. What is the money David paid to National called?
6. The insurance is expensive. Why does David insure the vehicle?
7. Why does David have the right to insure the vehicle?
8. What factors determine the cost of David’s truck insurance?
9. David called National to tell them about the accident. What is this called?
10. David expected National to pay for the damage to the truck under which coverage?
11. Will David have to pay any money for fixing the truck?
12. Will points be charged to David?
13. A friend tells David that he can make money off the insurance company if he exaggerates the damage to include a scratch made when David swiped a mailbox. Can David legally include the minor scrape too?
14. A hit and run driver sideswiped David. Which coverage will pay for the damages?
15. The owner of the mailbox got David’s tag number and called the police. When David called National to report the damages, which coverage will pay for the damage?
4.02 Activity 5 Homeowners Insurance
Critical Thinking
1. Beth and Jerry own a residential home valued at approximately $250,000. While they were away on vacation, lightning struck their house causing a large fire that did approximately $125,000. of damage to their home. Their homeowner’s insurance policy was up to date and they had proper damage limits in their coverage areas. Due to the damage to their home which included most of their furniture, electronic devices, televisions, personal clothing and Thereappliances; they will also have to live in temporary housing until their house is repaired which is estimated to be 10 months. Which coverage areas of their homeowner’s policy will provide the coverage for their loss including their housing? Be specific and state why you selected your answer with examples provided.
2. Jacob has a detached garage that he uses as a shop. In the winter Jacob has a large wood stove that he uses to provide heat while he is working in the shop. One Saturday, Jacob fired up the wood stove and left the shop to heat up. After he left, the flue pipe for the stove that went through the side of the garage for the stove’s exhaust got overheated and caught the side of the garage on fire. Before the volunteer fire department could get there, the garage was mostly gone and was declared a complete loss by the insurance adjuster. While Jacob has a homeowner’s policy, which section of his coverage will cover the loss of the garage? Will he be provided funds for loss of use while the shop is being rebuilt? Why or why not?
3. Jerry lives in San Francisco, California. He bought a house in a residential area that is away from the coast. However an earthquake occurs and his home is damaged to the point that he cannot live in it. Will his normal homeowner’s policy cover this damage? Why or why not? Be specific in your terms.
4.02 Activity 6
THEY’VE GOT IT COVERED!
Directions: Match the situation with the appropriate term. Terms may be used more than once or not at all.
BB30 Business Law 4.02 Summer 2013 Page 8 of 9
A. Bodily Injury Liability
B. Collision
C. Comprehensive
D. Homeowner’s
E. Insurable Interest
F. Insurance Company/Insurer
G. Insurance fraud
H. Insured
I. Joint Insurance
J. Medical Payments
K. Premium
L. Property Damage Liability
M. Renter’s
N. Risk management
O. Underwriter
P. Uninsured and Underinsured Motorist
Q. Whole Life
BB30 Business Law 4.02 Summer 2013 Page 8 of 9
1. ______A lightning strike at Troy’s home damages his TV and DVD player.
2. ______ABC Insurance Inc. advises Katie that she cannot take out a policy on Brad Pitt.
3. ______Adam’s job is deciding if the insurer will accept a risk and what the cost will be.
4. ______Amy decides not to purchase a new car because insurance is so expensive.
5. ______Cheetum’s Body Shop padded the repair bill for Chris’s pick up.
6. ______Janet hit a car and someone was hurt. This covers the medical expenses.
7. ______Keith let the auto insurance policy lapse. Keith rear-ended Ann’s truck today.
8. ______Missy owes for damage to John’s car because she hit him while talking on her cell.
9. ______Monica’s life insurance costs more but includes a savings component.
10. ______Pat insures his business partner, Chuck, with a $1 million life insurance policy.
11. ______Rob gets a bill in the mail from ABC Insurance Company for $125.
12. ______Ross contacted this business when he had an automobile accident.
13. ______Tammy hit a telephone pole and did over $2000 damage to her car.
14. ______Thomas shut the trunk on his thumb and went to the emergency room.
15. ______Tony and Chris staged an auto accident to collect claim benefits.
16. ______Wanda’s car was damaged by hail during a storm.
17. ______An ambulance transported Melanie to the hospital after the other car crossed the center line and caused a wreck.
LIFE INSURANCE DECISIONS
4.02 Activity 7
Millie and Tom Collins just celebrated their 10th anniversary. The couple bought two $50,000 term life insurance policies with American Insurance just after their marriage. Each month they pay $22 for Tom’s and $18 for Millie’s insurance. If either one died, the other is named to get the insurance money. The couple just adopted a baby girl, Barbara, and added coverage for the baby to their policy. The monthly cost for Barbara is $8.
1. American Insurance is what party to the contract?
2. Millie and Tom are what parties to the contract?
3. Why can Millie and Tom have insurance policies on each other?
4. What is the premium?
5. What is the face amount?
6. Can Tom and Millie borrow money from their cash value in the policy?
7. If the couple wants a policy that builds a cash value savings do they need to purchase anything different?
8. What is a beneficiary?
9. Who are the beneficiaries in this case?
10. Millie was in a fatal car accident. What will Tom receive?
11. What must Tom do to get the proceeds?
12. Will Tom have to pay tax on the life insurance proceeds?
13. What change did the Collins’ make?
14. Why is the cost of Millie’s insurance less than Tom’s?
15. Why is the cost of Barbara’s coverage less than Tom’s or Millie’s?
______
BB30 Business Law 4.02 Summer 2013 Page 8 of 9