LET 4 Sharing Risk - Using Insurance

All right, Let four is.

Now we're gonna talk about using insurance and what you're

doing when you use insurance is generally you're sharing risk.

Okay, so let's get into this lesson protecting what you

have. It's about insurance.

Let's look at this possibility of loss dealing with risk

is we're really talking about managing risk.

Well you can avoid it.

Let's use this in terms of of having a having

a car, driving a car.

You can avoid it by not driving right into blake

walking. But if you live in a town like Leesville

Louisiana, you have to drive.

If you lived in a big city where they had

metro's and public transportation, then you might could avoid driving

altogether. But here where we live, you're gonna have to

drive somewhere at some point.

So you can't really avoid it.

But avoiding it is an option and then the second

option is reducing it.

How do I reduce risk?

Well, I could try to make sure that I drive

more safely by doing some of these things on this

chart and you can think of the other things that

might be on this little bubble chart.

So I always wearing a seatbelt obeying the speed limits,

avoid night driving, especially if my vision is not very

good. Take a defensive driving course.

Um Make sure I'm not, you don't use my phone

while I'm driving to my phone off for my phone

out of my reach when I'm driving, make sure I

don't read or eat while I'm driving all these things.

We could fill up the bubble chart saying, here's here's

how I can try to help prevent an injury from

a car accident and that will reduce the risk, but

it won't eliminate the risk and it's still going to

be a risk associated with, with driving a car or

riding in a car so we can avoid it, we

can reduce it, we can accept it.

Now, what is accepted mean in this case, we'd say,

okay, I'm not gonna have insurance if I get in

a car accident.

Um, it's on me, I'm gonna pay for everything Now.

The problem there is, it's illegal in the state Louisiana

to drive uninsured.

So to accept the risk is, um, means you can't

completely accept it.

You're gonna have to share the risk because that's what

we're talking about.

We're talking about insurance, we're talking about sharing risk basically,

everybody that pays into insurance company pays their monthly premiums

into insurance company is, is providing money for those uh,

drivers or victims of crashes, crimes, et cetera, who would

have to make a claim, uh, to get some money

back from an insurance company.

So when we talk about sharing that risk, you're paying,

you might pay insurance bill your entire life and never

have an accent, never make a claim.

Well, what you're doing is you're you're protecting yourself in

the event that you did, and you're sharing that risk

and you're sharing that risk with everybody else who is

a member of that insurance company or our credit union

or association that pays into insurance.

So, you're gonna share it.

All right.

So, let's talk about some of the key terms associated

with insurance.

First of all, what is insurance?

Well, it's a means of guaranteeing your financial protection against

risk premium that's match you pay every month.

So you're gonna be you're gonna have a monthly bill

based on the amount of your policy and that's your

premium. That's what you pay.

That's the bill that you pay every month to maintain

your insurance coverage limit.

That's a maximum amount the insurance company will pay on

certain elements of your Uh insurance bill.

So for example, if you get collision insurance and your

maximum is uh 200,000 then you know, Well that's too

much for collision insurance, but if you had a maximum

of 20,000 on your collision, then that's what it would

be. If your liability insurance was 500,000 and maximum 500,000.

The deductible, that's the amount of loss you pay.

So when we have a deductible that comes out of

pocket before they're gonna step in pay the rest.

So you need to look at an insurance, one sheet

insurance and then you look them up on the Google

one looking for the insurance summary And I'll show you

in their deductibles because what you've got is you've got

a deductible that you pay.

So let's say I had an accident in my deductible

was $500.

Well before the insurance company picks up cost to repairs.

I've got to pay that 1st 500 and then they

pay The remainder.

So if the, if the damage is minor is less

than 500, there's no sense even making a claim because

I'm gonna pay that regardless.

So that's what a deductible is.

The amount that you agree to pay first.

Why would I even have a deductible?

Because the higher your deductible, the more is gonna bring

down the premium that you pay every month.

So you just got to make that decision.

That trade off decision in terms of deciding how much

of a deductible you want versus how much you want

to pay on your premium.

And insurance definitions.

Continued acclaim What is a claim?

Well, that's the report.

You get to the insurance company when you lose or

damage property or you get hurt.

Um, and you need to file a claim with the

insurance company and what is going to be required with

a lot of times.

Police reports, repair estimates, medical bills, et cetera.

When you have an accident after you check on the

other driver, of course, if there's two drivers involved, the

first thing you need to do is call the police

to get the police on the scene so they can

file a report and second call you need to make

is probably gonna have to be to your insurance company.

Hey, I just had an accident, especially if you have

towing coverage because if you pay for monthly towing coverage

and you want, you want insurance insurance company to come

and handle the bill of getting your vehicle towed to

the, to the shop where it's going to be repaired

okay? But the claim is the report that you make

when you have suffered from loss.

All right.

Hey, all of these things can help bring down insurance

costs or affect the insurance because I shouldn't say bring

down because in some cases we're not talking about bringing

down, we're just talking about has a has an impact

on it.

Um, do you drive to work?

How much mileage is it a year for you?

Do you drive to school?

Where is the car located where he lives at a

high crime area, Low crime area, high traffic area, you

know, low traffic area.

The make of the car, the type of car, Is

it, you know, a hot ride type car?

Or is it a car that's um known for, for

theft being, you know, people like to steal that type

of car.

Does it have a lot of safety features?

Have you been through a driver's education course?

What's your gender?

Because males are gonna pay more and Um insurance costs.

And females will because males just have uh tendency to

take more risks behind the wheel, your driving record, your

age, your insurance rates will go down once you hit

25, your marital status, once you're married, trance rates go

down. So all of these things affect the you get

a good student discount should have mentioned that.

And by the way, your credit rating, if you got

a poor credit rating, you're gonna have our insurance costs.

All these things affect your insurance costs.

And then of course in some states you can get

a military discount is for being a member of military,

military dependent.

These are all things you should look into when you

get your automobile insurance.

For example, when we keep talking about automobile insurance, just

make sure we understand there's automobile insurance, health insurance, life

insurance, dental insurance, there's uh workers comp type insurance.

There are specific insurance policies you can take out against

cancer. Um There are uh, homeowners insurance policies.

Of course you can ensure valuable items that you that

you own.

Let's say you had a um art piece that was

in your house and you wanted to ensure it separately

from the homeowner's insurance policy.

You can do that.

So there's a lot of different things that you would

want to ensure boats and motorcycles and all that kind

of stuff.

But let's get into looking at some of the coverage

is that might be considered specifically with different types of

insurance. Now, if the exposure, if the risk is accident

or injury, okay, you could lose income, you can have

medical bills, you possibly die.

You have to decide, hey, how much um do I

need in insurance to help me?

So lost income.

So you might have an insurance policy with a flag

that says, um, if I lose work, then sure I'm

going to get some money from the insurance company to

help me make it through that time until I can

start working again.

Um, And of course your medical insurance will be something

that covers your medical bills.

Life insurance.

If you've got somebody that depends on your income to

survive, then you need to have some life insurance so

that they can continue to survive after you're gone, especially

in the event that it's something sudden and unexpected property

ownership. If you've got a home or a car or

something like that, your home could be damaged or destroyed,

car could be stolen.

So you have to figure out, hey, what's, what's the

amount was the potential loss depending on the, the value

of the home or the value of the car.

And then liability, liability is a big one.

Um, because it protects you in the event that you

damage someone else's property or that you injure or kill

someone accidentally.

Of course you do it purposely, that's not going to

cover this.

But um, I have a buddy got a vehicle accident,

was sued Because he was at Fault in the accident

and he's been paying $1 million dollars back to a

couple. I don't know if he's still paying it, but

this was, you know, 30 years ago when he started

paying a million dollars back to this couple because he

lost his lawsuit, he didn't have liability, he didn't have

an umbrella liability insurance policy that covered him.

Um, Up to that amount.

You know, I'm sure he had a liability insurance might

have covered 300,500,000 of that million, but the rest of

it, he he had to pay.

So Liability insurance policies or something.

You can get a general liability insurance policy for $1

million. Does't cost a whole lot.

And that protects you in the event somebody sues you

for for something.

Um, So all these different insurance issues or things you

got to think about auto insurance coverage.

Normally when you get different types of on it, when

you get the auto insurance is gonna be different areas.

When the audio auto insurance that you need to be

thinking about, first of all liability, That's what you're at

fault for.

How much do you want to cover?

What's the suggested minimum 300,000 per accident, 100,000 per person.

Medical payments.

10,000 per person.

Um in the state Louisiana because we have so many

uninsured motorists, you have to have coverage to cover you

in the event that you get into an accident.

And it could be caused by the person that's uninsured.

But if they're uninsured, that means they don't have, insurance

company is gonna help pay that amount and they might

not have money in the bank.

So that's why our insurance costs are a little bit

higher for auto insurance in the state of Louisiana because

of so many uninsured motorist on the road.

And we're required by law than to carry um coverage

for uninsured motors.

Mhm. Okay.

Now, what does this uh different coverages cover?

We'll just talk briefly to that and we'll talk about

again, we're talking about auto insurance.

If there is a liability when you, cause when you're

responsible, it's gonna cover bodily image or property damage.

Is uh that you calls medical payments.

That will cover medical payments, funeral expenses for you and

members of your family um in the event of accident

also covers your family.

If they were to be a pedestrian, they get struck

by an automobile.

Okay? So that's what the medical payments proportional cover the

bodily injury for uninsured motorists and property for uninsured motorist

will cover these things, cover injuries um by the under

or uninsured driver and then damages to your vehicle, by

the under or uninsured driver.

Yeah. Mhm.

All right.

And then let's talk about how do we save money

because insurance costs money.

So how do we save?

Well, first of all, we probably need to shop around

a little bit, find out where we can get the

best rates compare insurance companies.

You see all the commercials on tv all the time.

Talk about.

They'll compare your rates, get your best rate.

You just got to find an insurance company that gives

you the quality of value for your money in terms

of, you know they're going to provide you with the

uh expert care that you need as well as a

good price.

You can purchase.

It's good to purchase more than one type of insurance

with the same insurance company because they'll bundle that insurance

and save you money on all the policies choose the

right car.

Don't smoke cigarettes and any time you smoke cigarettes is

going to raise your policy rates and just about everything.

Select higher deductibles when you're able to, if you're able

to afford a higher deductible then get a higher deductible,

have a good driving record, good grades that'll get you

a discount.

Can be careful before you consider adding writers or floaters.

What that means that means you had special conditions on

your insurance.

Like let's say you get really nice rims on your

car, You want to put extra insurance on these rims

because I really love them all.

Just think about that before you do that because that's

gonna really raise your rates a little bit and then

finally, um, ask about discounts.

If you haven't really, if you have an older car,

it doesn't have much value.

There's no sense carrying collision coverage, reduce your daily drive

and try to get your mileage down drive defensively.

Even take a defensive driving course that'll bring your rates

down, uh, anti theft devices and not parking your vehicle

in dangerous places.

It's a good idea.

Don't make excessive claims.

Like I said, if you're, if it's a minor damage

and you're gonna have to pay the deductible anyway, don't

even make a claim and then give keep tabs on

your credit because that also could affect your insurance rates.

Okay? So there's someone over the world insurance.

Make sure you go back, look at those key terms

back at the beginning.

Be familiar with those, uh, be generally familiar with how

insurance works.

And what I recommend you do is ask your parents

to look at their policy and just see what it

looks like.

All right.

LET 4 Sharing Risk - Using Insurance

Chapters

Audio TranscriptAuto-generated