7/21/2011

LESSON PLAN BUSINESS FINANCIAL MANAGEMENT

LESSON PLAN

BUSINESS FINANCIAL MANAGEMENT

KEY CONCEPT:

Know the appropriate uses of basic types of automobile insurance policies.

PERFORMANCE OBJECTIVES:

Research different insurance companies to determine best price according to the factors:

Age, gender, GPA, zip code. Read and explain an insurance policy. Identify 8-10 car insurance companies. Select 3-4 different cars from most expensive to least expensive.

PATHWAY STANDARDS ADDRESSED: BUSINESS FINANCIAL MANAGEMENT

C4.0 Students understand the role of insurance products and services in successful business management.

C4.1 Know the appropriate uses of basic types of insurance policies.

C4.2 Understand the ways in which insurance reduces risks.

ACADEMIC SKILLS REINFORCED:

WRITING

1.3 Use clear research questions and suitable research methods (e.g., library, electronic media, personal interview) to elicit and present evidence from primary and secondary sources.

1.7 Use systematic strategies to organize and record information (e.g., anecdotal scripting, annotated bibliographies.)

SPEAKING

2.2 Deliver oral reports on historical investigations.

2.4 Deliver multimedia presentations.

MATH

5.0 Students solve multi-step problems, including word problems involving linear equations and linear inequalities in variable and provide justification for each step.

FOUNDATION STANDARDS ADDRESSED:

1.0 Academics – Students understand the academic content required for entry into postsecondary education and employment in the Finance and Business Industry sector:

1.1 Mathematics – Read, write, and compare rational numbers in scientific notation (positive and negative powers of 10) with approximate numbers using scientific notation.

2.0 Communications – Students understand the principles of effective oral, written, and multimedia communication in a variety of formats and contexts:

2.1 Reading – Analyze the structure and format of functional workplace documents, including the graphics and headers, and explain how authors use the features to achieve their purposes.

2.5 Extend ideas presented in primary or secondary sources through original analysis, evaluation, and elaboration.

4.0 Technology – Students know how to use contemporary and emerging technological resources in diverse and changing personal, community, and workplace environments:

4.1 Understand past, present, and future technological advances as they relate to a chosen pathway.

4.2 Understand the use of technological resources to access, manipulate, and produce information, products, and services.

5.0 Problem Solving and Critical Thinking – Students understand how to create alternative solutions by using critical and creative thinking skills, such as logical reasoning, analytical thinking, and problem-solving techniques.

5.1 Apply appropriate problem-solving strategies and critical thinking skills to work-related issues and tasks.

5.2 Understand the systematic problem-solving models that incorporate input, process, outcome, and evaluation components.

5.3 Use critical thinking skills to make informed decisions and solve problems.

5.4 Understand how financial systems and tools are used to solve business problems.

8.0 Ethics and Legal Responsibilities – Students understand professional, ethical, and legal behavior consistent with applicable laws, regulations, and organizational norms:

8.1 Know major local district, state, and federal regulatory agencies and entities that affect industry and how they enforce laws and regulations.

9.0 Leadership and Teamwork – Students understand effective leadership styles, key concepts of group dynamics, team and individual decision making, the benefits of workforce diversity, and conflict resolution:

9.1 Understand the characteristics and benefits of teamwork, leadership, and citizenship in the school, community, and workplace settings.

9.2 Understand the ways in which pre-professional associations, such as DECA – A Marketing Association- and Future Business Leaders of America (FBLA), and competitive career development activities enhance academic skills, promote career choices, and contribute to employability.

9.3 Understand how to organize and structure work individually and in teams for effective performance and attainment of goals.

9.4 Know multiple approaches to conflict resolution and their appropriateness for a variety of situation in the workplace.

9.5 Understand how to interact with others in ways that demonstrate respect for individual and cultural differences and the attitudes and feelings of others.

MATERIALS:

Computer, internet access, PowerPoint, sample insurance forms, sample policies, policy from home, calculator, pen and paper.

MOTIVATION/OPENER:

List the cars you and/or your family already have.

Think of your dream car.

Think of what it’s worth.

Think of the cost and how much it will cost to insure.

Get out a pen and a piece of paper.

Tell me what you know about car insurance?

§ Types

§ Reason

§ Cost

§ Who needs

§ Laws

How many students have a driver’s license?

How many students own a car?

Do your parents own a car?

How many students plan on purchasing a car?

What types of cars?

Does the type of car make a difference in the cost of insurance?

PRESENTATION: (Teacher Activities)

State the objective: By the end of this lesson you will know the projected cost of your dream car and the related costs to maintain your ability to continue owning the car. You will also understand the four major types of insurance policies associated with both personal and business application.

Handout: Types of Automobile Insurance

DIFFERENT TYPES OF AUTO INSURANCE

If you own a car, no doubt you’ll understand when people sit around complaining about the cost of their car insurance. But, the fact is that the cost of you car insurance is going to depend as much on what type of car insurance you buy as it is on what insurance company you use to insure your car.

“So, what are the different types of auto car insurance options available? Look at your handout entitled Types of Automobile Insurance.

Anticipatory set: see motivation opener

Distribute sample handouts. Let’s look at a real life insurance policy one each of car, home, health and life. Provide sample organizer. Internet car shopping.

APPLICATION: (Student Activities)

Gather insurance company research using graphic organizers.

Create PowerPoint presentations (group students according to software/PowerPoint capabilities)

Complete handouts in groups. Identify leadership roles within the group, e.g., spokesperson, recorder, computer technician, proofreader/editor, etc.

ASSESSMENT/EVALUATION:

Have students compare and contrast using a Venn diagram

Oral presentation may include PowerPoint

Written test

Rubric development

CLOSURE:

Students profile their own policies by producing a written or typed proposal which will include :

· Type of insurance

· Cost of insurance for minimum coverage

· Cost of insurance for maximum coverage

· Requirements for coverage

· Term of policy

· Budget monthly payments for coverage period of 12 months

Oral five question quiz

Visual documentation – PowerPoint,

Written documentation - handouts

Types of Automobile Insurance

If you own a car, no doubt you’ll understand when people sit around complaining about the cost of their car insurance. But, the fact is that the cost of you car insurance is going to depend as much on what type of car insurance you buy as it is on what insurance company you use to insure your car.

So, what are the different types of auto car insurance options available?

Fully Comprehensive Auto Insurance

Fully comprehensive auto car insurance is without doubt the most expensive. However, with so many cars financed by finance companies, it is also probably the most common type of auto insurance – as the finance companies make it a requirement that the owner insure their automobile fully comprehensive.

In short, as its name suggests, fully comprehensive auto car insurance insures the owner of the car against all manner of events – from an accident to theft of the car. The upside of this type of insurance is there is no need to show ‘fault’ in order to claim. So, if you have an accident, which is not your fault, and the owner of the other car, who is at fault, doesn’t give you his insurance details, or, worse, is uninsured, you can still claim against your insurance company. Similarly, if your car is stolen, then fully comprehensive insurance allows you to claim against the insurance company.

However, do read your insurance policy carefully, as most auto car insurance companies refuse to insure 100% of the value of a car, choosing instead to only insure 80%, or so, of the value. The auto car insurance companies claim that doing this prevents fraudulent losses of cars where the owner of the car either no longer wants the car, or is encountering financial difficulty.

Third Party, Fire & Theft

Third party, fire & theft auto car insurance is a middle of the road car insurance package popular with those who have already paid off their auto loans, but who still have a certain level of intrinsic value in their car.

Under this type of auto insurance, most of the pay-out events covered under fully comprehensive auto insurance are covered – such as fire & theft. However, in the event of an accident, the insurance company is only required to pay-out if you are at fault, and you hit another car. So, in the event that you hit a wall, or only damage your car, the insurance company will not be required to pay. Likewise, if you are involved in an accident with another car, and are not at fault, your insurance company will not be required to pay-out, regardless of whether or not the other person has sufficient insurance to pay for the damage done to your car.

Third Party Insurance

Third party insurance is the ‘basic’ type of insurance, and only covers circumstances where you are involved in an accident, are at fault, and hit a third party. In all other events, the auto car insurance company is not required to make a payment. As such, it is also the cheapest type of auto car insurance you can purchase. That said, this type of insurance is usually only purchased by those car owners who have an old car with little or no value.

Specialized Car Insurance

Finally, strictly speaking any car over 25 years old is considered a ‘classic’. As such, this type of car should be insured as a classic car – with all of the benefits and requirements of such. Although ‘classic’ auto car insurance usually has all of the benefits of fully comprehensive auto car insurance, one significant disadvantage that classic car insurance has is that you are usually limited to the number of road miles you can drive in any given year – so check your policy carefully.


CALIFORNIA AUTOMOBILE INSURANCE REQUIREMENTS

According to California law, every owner and driver of a car must maintain financial responsibility for accidents. There are four ways to prove your financial responsibility: 1) coverage by an automobile or motor vehicle insurance policy; 2) a deposit of $35,000 with the Department of Motor Vehicles (DMV); 3) a surety bond of $35,000 obtained from a company licensed to do business in California; 4) DMV-approved self-insurance.

Obtaining an Insurance Policy
Insurance in the Bay Area is relatively expensive. There are three types of policies that insurance brokers may offer: preferred, standard, and assigned risk. Each type of policy will vary in price. Assigned risk is the most expensive and offers the least amount of coverage. You must qualify for the preferred policies. Preferred policies are reserved for California residents with a "clean" driving record dating back at least three years. Since most international drivers have little or no U.S driving experience, it is difficult for an international visitor, scholar or student to obtain a preferred policy. Unfortunately, most brokers tend to put international visitors in the assigned risk category. Due to this fact, most international scholars, students and visitors purchase auto insurance through California Casualty Auto Insurance (see below).

Insurance coverage
There are many different types of auto insurance you can obtain, offering a range of coverage. The minimum level of insurance coverage required by law is liability.

Liability coverage pays the amount (sometimes with certain limitations) for which you are legally responsible if you should injure someone or damage property while driving. All other types of coverage are optional.

Uninsured motorist coverage protects you and your passengers financially if you are injured by an uninsured or hit-and-run driver (if the driver is liable due to negligent behavior).

Collision coverage pays for damages to your automobile from a collision or single car accident. Liability of a given party need not be proven.

Comprehensive coverage pays for financial loss if your car is stolen, damaged by a natural disaster, vandalism or other non-collision causes.

California Casualty Auto Insurance
California Casualty and the University of California have a contract that benefits visiting scholars and post-doctoral fellows greatly. Most car insurance companies do not offer car insurance to drivers with no US driving experience. California Casualty also offers car insurance to University employees without a CA driver’s license (only an international or country license). They guarantee a 12 month rate. That means that they will not change your insurance rate for a whole year, even if you get in an accident. Most companies have a month-to-month rate or 6 month guaranteed rate. If you do not have experience driving in the US, your insurance will be higher than the average. However, if you have more than one car, you will receive a multiple-car discount. That means that the insurance for two cars in the same household will be cheaper than two separate policies. UC/lab employees can also sign up for a payroll reduction service (automatically pays for your insurance as a deduction from your paycheck before you receive it). There is no charge to cancel your policy before the contract is up, you will be refunded the difference.

Some insurance fee generalities:

  • Newer cars are more expensive to insure than older cars
  • The less you drive, the less your rate will be
  • Many factors contribute to the actual cost of your policy- commute distance, yearly mileage, year, make and color of car, age of driver(s), number of accidents/moving violation tickets, "good driver law"*
  • Cars newer than 1989 models will generally carry comprehensive and collision insurance
  • Cars older than 1989 models generally will not carry comprehensive and collision insurance

*The good driver law of California states that if you have 3 years or more of accident/ticket free driving in the US and have been in CA for 18 months or more, you are entitled to a discount on your insurance rate.

The following sample rates are fictional examples. They do not reflect the actual cost of insurance. Your individual policy rate will vary according to the many factors listed above. Your rate may be higher or lower, depending on many things.

Mr. John Doe

  • Born: January 1, 1965
  • Non-US citizen
  • no US driving experience
  • owns: 1995 Honda Accord (4-door sedan)
  • commute (to work): averages 5 miles per work day
  • average yearly mileage: about 10,000 miles
  • the sample yearly insurance rate*: $1,699

*insurance includes:

bodily injury ($3060) required
property damage ($2500) required
uninsured motorist ($3060) optional
comprehensive (fire, theft, flood) $3000 optional
collision ($500) optional

The monetary values listed here represent the maximum amount of coverage that Mr. John Doe has selected. In the case of an accident or theft, these numbers are the maximum amount of money that Mr. Doe can collect for each type of damage incurred. He can opt for less coverage and pay less money.

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