There are various types of personal risks we are all exposed to, and this includes the potential for a catastrophic loss. This module provides a great primer on the main types of personal risk, and the different techniques that can be used to handle these risks. Insurance is just one way to handle risk – what are some of the other ways that risk can be dealt with? What are the three rules of risk management? We take a look at the basic components of an insurance policy, along with an overview of terminology unique to insurance. What is the difference between a peril and a hazard? A moral and a morale hazard? What is an “insurable risk”? Property insurance is needed by most everyone, and this is covered in detail. What is and is not covered under the available types of homeowners coverage? How much insurance is needed? We take a close look at both homeowners and auto insurance. What are the various sections found in a personal auto policy? The final chapter concludes with an overview of umbrella liability policies.
Jim Pasztor, vice president of Academic Affairs at the College for Financial Planning is also involved with several of the College’s investment courses and the white paper series. He is a CFPM® practitioner, and has an MS degree in personal financial planning and an MSF degree in financial analysis, both from the College for Financial Planning. Jim was the recipient of the Edward D. Baker III Journal Award from IMCA in 2014 for his article Endogenous Risk and Dangers to Market Stability. You can reach Jim at email@example.com.