Welcome to Finance 230Introduction to Insurance

Professor Steve D’Arcy

TAs: Brian Alvin (Head TA)

Kathy Gu, Eric Lam, Bill Schneider, Neal Simons and Pan Wong

Let’s Learn About You and Try the i-clickers

What year are you at the U of I?

A) Freshman

B) Sophomore

C) Junior

D) Senior

E) Graduate Student

What College are You In?

A) ACES

B) Business

C) Engineering

D) LAS

E) Other

Where Is Your Hometown?

A) Illinois

B) United States other than Illinois

C) Europe

D) Asia

E) Other

Your Favorite Baseball Team

A) Cubs

B) Cardinals

C) Sox

D) Other National League Team

E) Other American League Team

Your Car Insurance Company

A) State Farm

B) Allstate

C) GEICO

D) Progressive

E) Other

How Many Auto Accidents Have You Had Since You Started Driving?

A) 0

B) 1

C) 2

D) 3

E) 4 or more

How Many Wins for the 2007 Illini?

A) Less than 3

B) 3-4

C) 5-6

D) 7-8

E) 9+

What you will learn during the semester

• What everybody needs to know about insurance– Auto Insurance– Homeowners Insurance– Health Insurance– Life Insurance– Structure of Insurance Industry

• Current Hot Topics in Insurance

What’s Hot Today• Health Care Costs

– higher and higher

• Term Life Insurance Costs – lower and lower

• Life Settlement Backed Security – death bonds

• Medical Malpractice Insurance

• Catastrophe Coverage – Natural Disasters

– Terrorism Risk

What’s Hot Today - continued

• Liability Cases

• Social Security Reform• Insurance Fraud

• Directors and Officers Liability Insurance• Life Insurance Sales Illustrations

Goal Setting AssignmentDue Friday, August 24

Setting

Significant

Attainable

Measurable

Goals

Significant Goals

• Your goals should be meaningful

• Achieving your goals should make a difference

• Example of a significant goal– Achieve an A in Finance 230

• Example of a goal that is not significant– Go to a movie this weekend

Attainable Goals

• Your goals should represent a stretch, but should still be possible to achieve

• Unrealistic goals set you up to fail

• Attainable goals serve to motivate you

• Example of an attainable goal– Getting to the gym 3 times a week

• Example of an unattainable goal– Losing 50 pounds by Labor Day

Measurable Goals• Your success in achieving a goal can be clearly

determined

• Someone else can see if you have achieved your goal

• Example of a measurable goal– Having a job within 3 months after graduation

• Example of a goal that cannot be measured– Having a good semester– Being happy with my life

Today’s Handouts

• Syllabus

• State Farm Car Policy

• Declarations Page

• Goal Setting Assignment

Situations Covered by the State Farm Car Policy

• While you are using your own car

• While other people are using your car

• While you are using other cars

• While other people are using other cars

Declarations Page

• Identifies Insured

• Describes Coverage

• Policy Period: 8/22/07 - 2/21/08

• Premium: $435.08

Coverage

A) Bodily Injury Liability

$100,000 Each Person

$300,000 Each Accident

Property Damage Liability

$100,000 Each Accident

This coverage is often described as:

100/300/100

Coverage (Continued)

C) Medical Payments

$25,000 Each Person

D) Comprehensive

G 100) $100 Deductible Collision

H) Emergency Road Service

Coverage (Continued)

U) Uninsured Motor Vehicle

$100,000 Each Person

$300,000 Each Accident

W) Underinsured Motor Vehicle

$100,000 Each Person

$300,000 Each Accident

What’s Next• Guest Speaker

– Todd Hart, State Farm Research Center Program Manager

• Pizza Lunch Party– Fridays 11:30-12:30– 370 Wohlers Hall

• Tontine Game starts Monday– Bring your I-Clicker!

• Goal Setting Project – Due Friday, August 24• Auto Insurance Policy