Minecraft
Preparation
Lesson Narrative
Students differentiate between homeowners and renters insurance, calculating coverage limits for personal property versus structural damage. They explore "excluded perils" (like floods or earthquakes) and calculate the mathematical difference between Actual Cash Value (ACV) and Replacement Cost payouts to understand why supplemental insurance is often mathematically necessary.
Learning Goals
• Compare the coverage structures of homeowners versus renters insurance.
• Identify excluded perils in standard property insurance policies.
• Calculate claim payouts using Actual Cash Value (ACV) versus Replacement Cost.
Student Facing Learning Goals
• Let's learn how to protect our belongings and our homes from disasters, and find out what standard insurance legally won't cover.
Student Facing Learning Targets
• I can explain the difference between renters and homeowners insurance.
• I know what an excluded peril is.
• I can calculate the difference between Actual Cash Value and Replacement Cost.
Required Academic Standards
National Jump$tart Standards:
• Risk Management and Insurance (Standard 1): Determine how to manage risk and protect against financial loss.
Glossary Entries
Homeowners Insurance: A policy that covers both the physical structure of a house and the personal belongings inside it.
Renters Insurance: A policy that covers a tenant's personal belongings, but not the physical structure of the building.
Excluded Peril: A specific disaster or event (like a flood or earthquake) that is legally not covered by a standard insurance policy.
Actual Cash Value (ACV): An insurance payout that subtracts depreciation from the replacement cost of a damaged item.
Replacement Cost: An insurance payout that covers the exact cost to buy a brand-new version of the damaged item today.
Lesson
Warm Up
6.4.1: The Apartment Fire
Launch: Have students stand in randomized groups of 3 at vertical whiteboards. Present the prompt verbally or project it. Give them 4 minutes.
Synthesis: Select two groups to share. Establish the baseline: The landlord's insurance covers the building (the walls). It does not cover the tenant's possessions. Renters need their own insurance.
Student Facing Task
Student-Facing Task: You rent an apartment. One night, the building catches fire. The apartment is destroyed, including your $2,000 laptop and all your clothes.
1. Does the landlord's insurance policy pay to replace your laptop?
2. Who is legally responsible for replacing your ruined belongings?
Activity 1
6.4.2: ACV vs. Replacement Math
Launch: Keep students at whiteboards. Project the payout scenario. Give groups 8 minutes to run the calculations.
Synthesis: Have the class observe the boards. (Teacher Key: 1. $1,000 - $500 depreciation = $500 payout. 2. $1,000 payout. 3. ACV leaves them $500 short of buying a new TV). Emphasize that "Replacement Cost" policies have slightly higher premiums but prevent out-of-pocket losses.
Student Facing Task
Student-Facing Task: A pipe bursts and ruins your 5-year-old television. You originally bought it for $1,000. Today, a brand-new TV still costs $1,000. However, the insurance adjuster says your old TV lost $500 in value (depreciation) over the last 5 years.
1. If your policy pays "Actual Cash Value" (ACV), exactly how much cash does the insurance company give you?
2. If your policy pays "Replacement Cost," how much cash do they give you?
3. Why is an ACV policy mathematically dangerous if you need to buy a new TV today?
Activity 2
6.4.3: The Excluded Peril
Launch: Present the disaster scenario. Give the whiteboard groups 10 minutes to analyze the financial impact.
Synthesis: Facilitate a class debate. (Key: Floods are almost always excluded from standard policies. The homeowner must pay the full $50k out of pocket). Discuss why homeowners in high-risk areas must purchase separate, supplemental flood or earthquake policies.
Student Facing Task
A massive hurricane hits the coast. The storm surge floods a house, causing $50,000 in water damage to the floors and walls. The homeowner files a claim, but the insurance company legally denies it, calling the flood an "Excluded Peril."
1. What does "Excluded Peril" mean in an insurance contract?
2. Who is now financially responsible for the $50,000 in repairs?
3. How could the homeowner have mathematically protected themselves from this specific risk?
Lesson Synthesis
Narrative: Bring the class back to their seats. Review the student-facing learning targets. Summarize: "Property insurance doesn't cover everything automatically. You must read the fine print to know exactly what perils are excluded, and always opt for replacement cost coverage."
Cool Down
6.4.4: The Landlord Myth
Narrative: This exit ticket serves as a formative assessment on renters insurance necessity.
Teacher Rubric: A successful response must articulate that the landlord's policy only protects the landlord's financial interests (the building structure). The tenant must have a separate renters insurance policy to protect their personal property inside the box.
Student Facing Task
A friend says, "I don't need to buy renters insurance because my landlord already has insurance on the apartment building." Mathematically and legally, why is your friend making a terrible financial decision?