knowledge
People are at risk when accidents may harm their health, incomes, assets, wealth and future opportunities.
application
Depict a scene where a tree is blown down by the hurricanes and fall onto the roof of a house. Show how it influences a family’s financial situation.
knowledge
Insurance allows people to transfer a potential loss on cost to a third party by paying in advance a certain amount of money, the premium.
application
Explain why house owners are willing to buy a $300 flood insurance even though their houses locate in regions that are unlikely to be stuck by floods.
knowledge
In order to formulate insurance policies, insurance companies analyze how consequences differentiate when different people face similar risks. With the regular premiums from policyholders, insurance companies establish a funding pool to compensate people for their great losses.
application
Explain how house owners reduce the risks caused by fires and storms by owning landlord insurance that is shared with other policyholders. Identify the key information insurance companies need to determine the premiums on policyholders.
knowledge
Sometimes people accept certain risks and make regular deposits to cover the potential losses, which is called self-insurance.
application
Give examples of potential incidents and their costs for which people tend to make self-insurance.
knowledge
Insurance principles guarantee that when losses take place, more compensation are got by paying a higher insurance price.
application
Explain how a deductible affects the compensation of a bicycle insurance and how people’s decisions on deductibles influence the insurance prices.
knowledge
Insurance companies charge more for people and incidents with higher risks, because they are more likely to suffer financial losses.
application
Explain why drivers will face a higher insurance price if they are repeatedly punished for exceeding the speed limit.
knowledge
Individuals can accept certain risks, take measures to lower the risks or transfer them to others by buying insurances. Each option has its own costs and benefits.
application
Think about how drivers can avoid, reduce or transfer risks in car accidents. Explain why people prefer to buy fire insurances for their houses and to make self-insurance for their tooth decay.
knowledge
Social media and other online activities expose individuals to harms. For example, people’s personal information may be stolen and abused.
application
Learn how identity thieves get people’s personal information. List the ways in which people can protect their information.