Work by yourself to answer the following questions. Record your answers in your technology notebook.
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Each set of data gave the probability of three different types of events. Did that make it easier or more difficult to decide where you should place each data set on the map? Why?
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Usually homeowners must buy insurance for their houses. If a natural event such as a bad storm does damage to a house, the insurance company will help pay to repair the damage. People must buy insurance before anything happens. Why would people pay for insurance if they may go for many years without having any natural events damage their homes?
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Insurance costs more in some places than in others. Insurance usually costs more in places that have a higher probability of some serious event. Examples of events that raise the cost are hurricanes, earthquakes, and wildfires. How would knowing about probability help insurance companies set the cost of insurance?
Answers to Reflect and Connect
Allow students time to answer these questions. Once they have had time to complete their responses, you may want to hold a class discussion on some or all of them.
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Each set of data gave the probability of three different types of events. Did that make it easier or more difficult to decide where you should place each data set on the map? Why?
It was probably more difficult for students to decide where to place each data set on the map. Up to this point in the module, students have considered one type of natural event at a time. In this activity, students were asked to think about the probabilities of several different events occurring in a given location. Often a location may have a low risk for some events, a moderate risk for other events, and perhaps a high risk for still other events. Other locations may have moderate or high risks for several events.
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Usually homeowners must buy insurance for their houses. If a natural event such as a bad storm does damage to a house, the insurance company will pay to repair the damage. People must buy insurance before anything happens. Why would people pay for insurance if they may go for many years without having any natural events damage their homes?
Many people may go for several years without experiencing damage to their houses that would be covered by insurance. At first, this may seem as though people were wasting their money by paying for insurance. However, if an event does occur that damages a house, the insurance pays for the repairs. The repairs may cost more than the homeowners can afford and more than the cost of insurance during years without any damage to their home.
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Insurance costs more in some places than in others. Insurance usually costs more in places that have a higher probability of some serious event. Examples of events that raise the cost are hurricanes, earthquakes, and wildfires. How would knowing about probability help insurance companies set the cost of insurance?
Insurance usually costs more in places where there is a higher probability of a serious natural event occurring. For example, people may pay higher insurance premiums for houses built in areas with a high chance of forest fires. If the probability of a natural event is higher, then the more likely it is that insurance companies would need to pay to repair houses in that location. Therefore, the insurance companies would need to charge more so they have the money to pay the claims when damage occurs.