Why is NJ insurance premiums the highest in the nation? Population, high car density, labor costs, lawsuits, car theft
How do insurance companies determine your premium? Type of coverage Amount of coverage Driving experience Type of car Where you live Where you drive How much you drive Your grades Driver training Driving record.
Why get insurance? To protect your assets Assets: Possessions (House, cars, boat, savings, stock, bonds….)
Appreciation/Depreciation Appreciation: When the value of something goes up. (Houses and properties when the economy is strong) Depreciation: When the value of something goes down. (Most cars)
Policy The written agreement between you and the insurance company.
Premium: the amount of money you pay the insurance company for coverage.
Liability (split limits) : pays for damages to others injured by you and property damage other than your own. This type of insurance that is mandatory in New Jersey
Collision: pays for damages to your own car that occurs due to an accident.
Deductible: You agree to pay a certain amount before the insurance company pays. The higher the deductible the less you pay for the premium. This is part of your collision coverage or PIP.
Comprehensive: covers damages to your car due to vandalism, theft or “Act of God”.
Personal Injury Protection: This will pay for medical expenses due to a single car accident or the person that hit you did not have enough coverage.
Income Protection: This will allow you to collect part of your salary if you are out of work for an extended period of time.
Uninsured Motorist Protection: This protects you if you are in an accident with someone who does not have insurance.
Surcharge: These are additional charges to your insurance cost that you will receive for moving violations and accidents. –DUI / $1000 each year for 3 years –Refusal of Breath Test –Driving without insurance –Driving with a suspended license.
Split Limits of Liability Example: 15/30/5 15 (first #) Bodily injury per person up to $15,000 30 (second #) Bodily injury per accident up to $30,000 5 (third #) Property damage $5,000
You are in an accident where you hit another car with 3 people in it. One person has medical bills of $20,000. The other two people have medical expenses of $8,000 and $2,000. The car had $4,000 worth of damage and you also hit a fence that cost $2,000 to replace.
Split Limits 15/30/5 Policy Cost You Most injured: Other injuries: Damage car: Damage fence: Total Paid: