1. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 1 INSURANCE UNIT 11

2. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 2 Insurance Any form of insurance is that you pay a relatively small amount so no one gets caught with a large financial loss. i.e. $500/year homeowners policy will pay for a $100,000.00 house or a $500,000.00 lawsuit.

3. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 3 Types of insurance other than automobile insurance All forms of insurance are the same concept. You protect against a large financial loss. Homeowners, life, health, renters, disability, dental are just some of the forms of insurance other than car insurance.

4. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 4 Financial responsibility" In NC, as most other states, an owner/driver is required to prove financial responsibility in order to legally operate a motor vehicle. A driver must be responsible for any damage he/she does to someone else or their property.

5. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 5 Ways for someone to prove financial responsibility in North Carolina The two ways to prove financial responsibility are – to post a cash bond, in effect self insuring you or your company – buy liability insurance.

6. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 6 Personal injury liability Personal injury liability (PIL) insurance protects the owner/driver against having to pay for injuries they have caused to others. PIL will pay up to the limit, amount purchased, of the policy.

7. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 7 Personal injury liability The minimum amount allowed by law in NC is $60,000.00 per accident, all persons injured, and $30,000.00 per person, anyone person. This is not enough coverage to adequately protect you if you seriously hurt someone. 100/300 or 300/300 might be a better choice even if it costs a little more in premiums.

8. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 8 Property damage liability Property Damage Liability (PDL) insurance pays for damage you do to another person's property (car, house, yard, mailbox, etc.). Your company will pay, up to the limit of the policy, to fix other's property.

9. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 9 Property damage liability NC requires a minimum of $25,000.00 PDL. For about $4 more per year, you can buy $50,000.00 coverage. (May 2000) DMV requires proof of both types of liability insurance to get a license plate or a driver's license. A DL 123 form is filled out by an insurance agent as proof of liability coverage.

10. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 10 Collision coverage insurance Collision insurance protects your car when you are at fault in a collision. Your company will pay up to the "book" value of your car in the event you damage it, minus the deductible. Deductibles are the portion you pay first before the insurance company pays.

11. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 11 Collision coverage insurance Deductibles are usually $250.00 - $1000.00, with the higher the deductible the lower the premium. Any collision claim will raise your future premiums. Collision is required if you lease or borrow money against your vehicle.

12. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 12 Comprehensive insurance Comprehensive insurance pays to repair your vehicle from "acts of God", theft, vandalism, damage that you are not responsible for, or even a deer damaging your car. Again your company will pay up to the book value.

13. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 13 Comprehensive insurance Comprehensive claims do not increase your rates because they are not your fault. Comprehensive is also required for a loan or lease.

14. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 14 Medical payments insurance Medical payments insurance pays for you or your passengers medical bills, regardless of fault, up to the limit of the policy. $5,000.00 is currently the maximum amount available in NC.

15. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 15 Medical payments insurance This will pay for minor injuries, ambulance, ER visits, and deductibles on major medical policies. It is not intended to cover all medical bills. You are not required to have medical payments coverage.

16. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 16 Uninsured motorist insurance Uninsured motorist coverage protects the owner/driver against another driver, at fault, not having any insurance. Your company will pay your medical and vehicle repair bills, up to the limit of the policy, if the other driver does not. You are not required to have uninsured motorist coverage.

17. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 17 Under insured motorist insurance Under insured motorist coverage protects the owner/driver in the event the other driver (at fault) has insurance but not enough to cover the judgment. Your company pays what their company does not, up to the limit of your policy. You are not required to have underinsured motorist coverage.

18. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 18 Rental reimbursement coverage Rental reimbursement coverage will pay for a rental car when your car is being repaired under collision coverage. (Not required)

19. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 19 No-fault insurance NC does not have "no-fault" insurance but if you run into someone from a state with this type of coverage, you will be covered as you would any other type of coverage. Their company will pay if their policy holder is at fault.

20. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 20 Necessary coverage for a rental car If you rent a car, the rental company requires you to insure their car. If you have comprehensive and collision on your vehicle, it will cover the rental car at no extra charge.

21. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 21 The difference between driver license points and insurance points in North Carolina Driver license points are used to revoke a person's license. Insurance points are used to determine rates. See the handout.

22. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 22 How much insurance points will affect rates Insurance points increase premiums – 1 point 15% – 2 points 40% – 3 points 65% – 4 points 90% – 5 points 120% – 6 points 150% – 7 points 180% – 8 points 220% – 9 points 260% – 10 points 300% – 11 points 350% – 12 points 400%

23. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 23 Factors in North Carolina that affect insurance rates There are many factors that can and do affect insurance rates. – A. Driving record (see above) – B. What the vehicle is used for – C. Where you live and drive – D. Driving experience - An inexperienced driver pays an additional 150% for the first two years and 100% for the third year. After three years experience the rates return to normal. – E. If you have more than one vehicle on a policy, you get a 20% car discount for each vehicle.

24. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 24 Factors in North Carolina that affect insurance rates There are many factors that can and do affect insurance rates. – F. The amount of coverage (30/60/25, 100/300/50) will affect your premiums. – G. Type of vehicle insured. Expensive vehicles cost more to insure. Vehicles with high accident rates cost more. Vehicles that are stolen more, cost more. Check with your agent before leasing or buying that new vehicle. – H. Living in NC costs you less too. Only Idaho, Nebraska, North and South Dakota and Iowa have cheaper car insurance. – I. Being a high risk driver can put you in the Reinsurance Facility.

25. Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 25 Factors that will not affect insurance rates in North Carolina Insurance rates in NC are not based on age, gender, marital status, grades, driver education, or color of the vehicle.