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Reflecting on… Protect WhatYou’ve Earned
LET’S PRACTICE
Name: _____________________________________________________________________________
Franklin and Fiona are Frustrated Remember our friend, Franklin? He’s doing well in his career. He’s married now. His wife, Fiona, is in graduate school finishing her masters degree in physics. They have a little baby named Finn and a dog named Fido. Life is great for Franklin, Fiona, Finn and Fido. They realize that to be financially literate, they should know a bit about insurance but it’s so frustrating! The forms, the terms, the policy rules...! They heard you recently had an awesome lesson in insurance basics, so they’re asking you to explain some of this insurance stuff to to them.
Dear Students, Please help Franklin and Fiona understand insurance. Thank you, Fido
1. Franklin and Fiona are buying a house and applying for a home loan. The lender told them they must have homeowner’s insurance because it covers loss of or damage to their home in case of a fire, storm or other damage-causing event. Franklin thinks this is a waste of money because he’s pretty good at fixing stuff. Will Franklin get the loan without homeowner’s insurance? Explain why the mortgage lender requires insurance. _ ______________________________________________________________________________ _ ______________________________________________________________________________ 2. Franklin and Fiona buy the house and get homeowner’s insurance. They like to play lacrosse in the yard. One day Fiona goes in for the attack and misses. The ball hits a guy riding his bike past their house. He goes up over the curb, slams into their neighbor’s car and makes a huge dent. The bike is totaled and the rider breaks his arm. What a mess! Franklin is worried. He thinks their homeowner’s insurance covers only damage to their own house. Should he be worried? Explain who will pay for the neighbor’s property damage and the bicyclist’s medical costs ? _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ 3. Franklin and Fiona are cooking French fries when the fryer freaks out and catches fire. It’s all they can do to grab baby Finn and Fido and get out before the house burns to the ground. They are devastated! They’ve lost their home and all of their personal belongings. Sadly, they make plans to live in their car. Have they lost everything? Explain what their homeowner’s policy covers and what, if anything, they will have to pay to rebuild the house and replace the contents . _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ PRODUCT PREVIEW
Chapter 15 | Protect What You’ve Earned 298
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