T-19.0 Driving Through A New Century Topic 1 Insuring Vehicle Topic 2 Purchasing Vehicle INSURANCE

T-19.1 Driving Through A New Century Insuring a Car State law requires you to have car insurance.State law requires you to have car insurance. If you still owe money on your car, your lender can require insurance.If you still owe money on your car, your lender can require insurance.

T-19.2 Driving Through A New Century PA Auto Insurance You must show Proof of Financial Responsibility when you:You must show Proof of Financial Responsibility when you: –Are asked for it by a police officer –Have a collision –Register your car or renew its plates –Obtain or renew a driver license –Get your car inspected

T-19.3 Driving Through A New Century PENNSYLVANIA AUTO INSURANCE Required Minimum CoverageRequired Minimum Coverage –Bodily Injury $15,000 per person$15,000 per person $30,000 per accident$30,000 per accident –Property Damage- $5000 –Medical Payments-$5,000

T-19.4 Driving Through A New Century Bodily Injury Coverage Pays:Pays: –Other people’s medical expenses Covers:Covers: –15 per person –30 per accident –If medical expenses are more, you pay! Required?Required? –Yes, by State law

T-19.5 Driving Through A New Century Property Damage PAYS PAYS – for ALL property damaged that occurred Covers Covers –5,000 if you were found to be at fault Required Required –Yes, by State Law

T-19.6 Driving Through A New Century Medical Payments Coverage Pays:Pays: –Medical- 5,000 –Funeral expenses Covers:Covers: –You –Your family –Your passengers Required?Required? –Yes, required by State law

T-19.7 Driving Through A New Century State Personal Auto Policy Eight Types of CoverageEight Types of Coverage -Personal Injury Protection/Wage Loss –Uninsured –Underinsured Motorist –Collision –Comprehensive –Towing & Labor –Rental Reimbursement

T-19.8 Driving Through A New Century Personal Injury Protection (PIP)Coverage Pays:Pays: –Medical expenses –Funeral expenses- $2,500 –Lost wages- $1,000 a month Max –Homemaker/caregiver services Covers:Covers: –You –Your family –Your passengers Required?Required? –Not by State law, but company must offer

T-19.9 Driving Through A New Century Uninsured/Underinsured Motorist (UM/UIM) Coverage Pays: $15,000/$30,000Pays: $15,000/$30,000 –Medical expenses –Funeral expenses –Car repairs –Car rental –Replacement of damaged contents Covers:Covers: –You –Your family –Your passengers Required?Required? –Not by State law, but company must offer

T Driving Through A New Century Collision Coverage Pays:Pays: –Your car repair –Your car replacement –Actual Cash Value Covers:Covers: –Your car –Regardless of driver –Deductible-$250/$500 Required?Required? –Not by State law, but by car loan lenders

T Driving Through A New Century Comprehensive Coverage Pays:Pays: –Car repair or replacement after Fire,theft or other non-collision eventFire,theft or other non-collision event Deductible up to 1,000 RATES DON’T GO UP rental car after theftrental car after theft Covers:Covers: –Your car Required?Required? –Not by State law, but by car loan lenders

T Driving Through A New Century Towing & Labor Coverage Pays:Pays: –Towing –Labor charges –When your car is disabled Covers:Covers: –Your car Required?Required? –Not required by State law

T Driving Through A New Century Rental Reimbursement Coverage Pays: Pays: –A rental car –Your car is undergoing repair –For covered damage Covers:Covers: –You –Your family members Required?Required? –Not required by State law

T Driving Through A New Century Insurance Costs How car rates are determinedHow car rates are determined Factors used in establishing ratesFactors used in establishing rates DiscountsDiscounts –Mandatory –Non-mandatory

T Driving Through A New Century Insurance Costs Factors Used to Determine Your Premium Drivers CharacteristicsDrivers Characteristics –Your age and marital status Highest ratesHighest rates –Male and female drivers under 25 –Unisex state Driving RecordDriving Record Years LicensedYears Licensed Policy HolderPolicy Holder

T Driving Through A New Century Insurance Costs –Make & Model- VIN NUMBER –County where you keep your car Urban counties have more accidents and auto thefts; tending to be higher than those of rural areasUrban counties have more accidents and auto thefts; tending to be higher than those of rural areas –Your car AgeAge Safety featuresSafety features Collision and comprehensive ratesCollision and comprehensive rates –Highest for luxury, high-performance, and sports cars –Higher for cars that damage easily –Higher for cars that cost more to repair

T Driving Through A New Century Insurance Costs Factors used to determine your individual premiumFactors used to determine your individual premium –Your deductibles Your share of the cost of a collision or comprehensive claimYour share of the cost of a collision or comprehensive claim Reduce your premium by raising your deductiblesReduce your premium by raising your deductibles –Surcharges Added for collisions resulting in property damage of $1,000 or more Added for collisions resulting in property damage of $1,000 or more –Discounts Some required by the state, while others are optional with companiesSome required by the state, while others are optional with companies Mutuals are not required to give any discountsMutuals are not required to give any discounts

T Driving Through A New Century Premium Discounts Auto Insurance Discounts Savings Defensive driving and driver education courses for young drivers Airbags and other passive restraints Good Student Anti-theft devices Two or more cars on a policy 10 percent off Liability, Collision Medical Payments, and PIP 15 percent off Medical Payments and PIP (driver’s side) 30 percent off Medical Payments and PIP (both sides) 5 percent off Liability, Collision, Medical Payments, and PIP Reduces Comprehensive premium; amount varies by device and county 20 percent off Liability, Medical Payments, and PIP 15 percent off Collision Education and Car Equipment Saves

T Driving Through A New Century Premium Discounts Companies may give optional discounts for: Companies may give optional discounts for: –Your age and annual mileage driven –Policy renewal, with a good claims and driving record anti-lock brakes –A parent or family whose young driver is away at school without a car –Full-time college and high school students with a "B" or 3.0 average –Cars with automatic daytime running lights –Membership or adult leadership in certain youth organizations.

T Driving Through A New Century "High Risk" Drivers Each company has its own rulesEach company has its own rules –called "underwriting guidelines" –for deciding whether to insure people Makes it harder to get car insuranceMakes it harder to get car insurance Must pay higher premiumsMust pay higher premiums Insurance for high risk driversInsurance for high risk drivers SurchargesSurcharges

T Driving Through A New Century "High Risk" Drivers Your Driving Record Will Cost You One collision (at-fault) in 36 months Two collisions Three collisions Each moving violation (speeding, etc.) Involuntary manslaughter Driving under the influence Criminally negligent driving No license, or license suspension 15% 35% 60% 0% 60% 35% * Surcharges for most drivers are percentages of the rates in your county for liability, collision, PIP, and medical payments coverage. Accident or Violation (Premium Cost will increase by) Surcharge *

T Driving Through A New Century Buying a Car New or Used? New or Used? What Do I Need It To Do? What Do I Need It To Do? What Safety Features Are Needed? What Safety Features Are Needed? How Much Will It Cost? How Much Will It Cost? How Economical Is It? How Economical Is It? What Options Do I Need? What Options Do I Need?

T Driving Through A New Century Your Monthly Payment PriceFormula Price Formula What is the Monthly Payment? Vehicle Price Purchase Price x Interest Rate x Length of Finance Purchase Price - $12,000 Interest Rate - 7 percent Length of Finance - 48 months Purchase Price + Interest+ Sales Taxes = Total Price over 16,000.00