vehicle insurance - northern highlands regional hs / …€¦ · ppt file · web...
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Vehicle Insurance
Chapter 33
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Basics
Bodily Injury Liability
Property Damage Liability
CollisionInsurance
MedicalPaymentsCoverage
Comprehensive Coverage
UninsuredMotorist
Protection
MiscellaneousCoverage
• Insurance – paid protection against losses due to injury or property damage
• Policy – contract between ins co and policyholder that explains amt/types of coverage• Insurer – issues the policy• Policyholder – buyer of the policy
• Liability insurance – most basic type of coverage; protects you from claims of injury/property damage to others
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Basics
Bodily Injury Liability
Property Damage Liability
CollisionInsurance
MedicalPaymentsCoverage
Comprehensive Coverage
UninsuredMotorist
Protection
MiscellaneousCoverage
• Bodily Injury Liability ins covers injuries to someone else.
• Stated in thousands of dollars• 1st figure -> injuries to one person• 2nd figure -> total for one accident• Example: 100/300 bodily injury: $100,000 for injuries to one person $300,000 for all claims
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Basics
Bodily Injury Liability
Property Damage Liability
CollisionInsurance
MedicalPaymentsCoverage
Comprehensive Coverage
UninsuredMotorist
Protection
MiscellaneousCoverage
• Property Damage Liability ins covers damage to another person’s vehicle/property (also covers telephone poles, signs, etc.)
• Policy might quote all liabilities together• Example 100/300/50 $100,000 for injuries to one person $300,000 for all claims $50,000 for property damage
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Basics
Bodily Injury Liability
Property Damage Liability
CollisionInsurance
MedicalPaymentsCoverage
Comprehensive Coverage
UninsuredMotorist
Protection
MiscellaneousCoverage
• Collision insurance covers damages to your own vehicle
• Max amt covered based on actual cash value of your vehicle, which is orig value minus depreciation
• Depreciation – decline in value of a vehicle because of use
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Basics
Bodily Injury Liability
Property Damage Liability
CollisionInsurance
MedicalPaymentsCoverage
Comprehensive Coverage
UninsuredMotorist
Protection
MiscellaneousCoverage
• Medical payments coverage is also called personal injury protection
• Covers injuries to you or anyone else in your car
• Typical coverage: $5,000 -$10,000
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Basics
Bodily Injury Liability
Property Damage Liability
CollisionInsurance
MedicalPaymentsCoverage
Comprehensive Coverage
UninsuredMotorist
Protection
MiscellaneousCoverage
• Comprehensive coverage covers damage to a policyholder’s vehicle caused by things other than a car accident
• Examples: falling objects, theft, flood damage, vandalism
• Will not cover more than the actual value of the car
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Basics
Bodily Injury Liability
Property Damage Liability
CollisionInsurance
MedicalPaymentsCoverage
Comprehensive Coverage
UninsuredMotorist
Protection
MiscellaneousCoverage
• Uninsured motorist protection covers you from people who can’t pay insurance claims
• Anyone riding with you is also protected• If you’re hit by a vehicle while walking you are
also covered• Most states require this
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Basics
Bodily Injury Liability
Property Damage Liability
CollisionInsurance
MedicalPaymentsCoverage
Comprehensive Coverage
UninsuredMotorist
Protection
MiscellaneousCoverage
• Other types of protection:• Coverage for a rental car• Cost of towing• Coverage for others who use your car• Add a work vehicle to your policy• Motorcyclists, motor scooters, and
snowmobiles need insurance too
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
FinancialResponsibilityLaw
CompulsoryInsuranceLaw
No-FaultInsurance
Laws • States have laws requiring drivers to show proof that they can pay for any injuries or damages they may cause
• Also protects you from other drivers• Laws vary state to state
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Laws • Financial responsibility law – says you must pay for any damage or injury you cause in an accident either with insurance, savings or by selling property
• If you can’t pay, you can be sued, lose your license, or lose your car
FinancialResponsibilityLaw
CompulsoryInsuranceLaw
No-FaultInsurance
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Laws • Compulsory insurance law – legally requires drivers to have a minimum amt of car ins
• You must show proof of insurance before you can get a license or register your car
• Police also ask for insurance when you get pulled over
FinancialResponsibilityLaw
CompulsoryInsuranceLaw
No-FaultInsurance
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Laws • No-fault insurance – law that requires drivers involved in accidents to collect damages from their own insurance companies no matter who is at fault
• When there is a dispute about who is at fault
FinancialResponsibilityLaw
CompulsoryInsuranceLaw
No-FaultInsurance
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Costs
InsurancePremiums
Deductible
Factors
Type Of
Vehicle
Location
DriverClassification
DrivingRecord
• The average annual car insurance cost: $1,200• Cost of insurance is directly affected by the
amount insurers pay out in claims• Claim – a request for payment from an insurer
for any damages covered by a policy• The more they pay, the more we pay
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Costs
InsurancePremiums
Deductible
Factors
Type Of
Vehicle
Location
DriverClassification
DrivingRecord
• Premium – amt an insurance company charges a policyholder for an insurance policy
• Premium covers policyholder for a period, usually a year, and then is renewed
• Insurer can cancel a policy or refuse coverage
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Costs
InsurancePremiums
Deductible
Factors
Type Of
Vehicle
Location
DriverClassification
DrivingRecord
• Deductible – an amount in damages a policyholder must pay before the insurance company pays anything
• Makes you responsible for small losses and the insurer helps pay for the larger losses
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Costs
InsurancePremiums
Deductible
Factors
Type Of
Vehicle
Location
DriverClassification
DrivingRecord
• Factors that affect the cost of insurance:• Claims paid out• Amount of coverage• Amount of deductible• Type of vehicle• Vehicle usage• Geographic location• Age
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Costs
InsurancePremiums
Deductible
Factors
Type Of
Vehicle
Location
DriverClassification
DrivingRecord
• Premium will vary according to:• Make• Model• Year
• New cars and cars with expensive parts are more expensive to insure
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Costs
InsurancePremiums
Deductible
Factors
Type Of
Vehicle
Location
DriverClassification
DrivingRecord
• Where you live affects your premium• Area w/ high crime rate/vandalism/theft will
be higher• City drivers more expensive than rural
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Costs
InsurancePremiums
Deductible
Factors
Type Of
Vehicle
Location
DriverClassification
DrivingRecord
• Driver classification includes factors like:• Age• Gender• Marital Status
• <25, >70 have more accidents• Young men > young women
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Types of Vehicle Insurance Laws on Vehicle Insurance The Costs of Insurance
Costs
InsurancePremiums
Deductible
Factors
Type Of
Vehicle
Location
DriverClassification
DrivingRecord
• Major factor: driving record• Accidents/traffic violations = higher premiums• Drivers education course/good grades = lower
premiums