1. Automobile Insurance: The Basics

2. What is the likelihood you will be in an automobile accident? What is the likelihood you will be in an automobile accident? There are more than 12 million motor vehicle accidents annually There are more than 12 million motor vehicle accidents annually The typical driver will have a near automobile accident one or two times per month The typical driver will have a near automobile accident one or two times per month The typical driver will be in a collision of some type on average of every 6 years The typical driver will be in a collision of some type on average of every 6 years Crashes are the leading cause of death for ages 3-33 Crashes are the leading cause of death for ages 3-33 Rock the Belt

3. Automobile Insurance: The Basics Even a minor accident can result in thousands of dollars in damages Damage to your carDamage to your car Damage to other cars involvedDamage to other cars involved Medical BillsMedical Bills Lost wagesLost wages Pain and sufferingPain and suffering ProsecutionProsecution Legal FeesLegal Fees FinesFines

4. Automobile Insurance: The Basics What is Automobile Insurance? An auto insurance policy is a contract between you and an insurance company. You pay a premium, and in exchange, the insurance company promises to pay for specific car-related financial losses during the term of the policy.

5. Why do I need auto insurance It’s the law!It’s the law! There are risks you can’t afford to takeThere are risks you can’t afford to take What happens if…What happens if… –You’re involved in a crash that causes property damage? –You hurt yourself or someone else? –Your car is damaged when you’re not driving it? (by weather, vandalism or a hit-and-run) –Your car is stolen? –Your car breaks down and needs to be towed?

6. Automobile Insurance: The Basics Are you a risk to the insurance company? To keep premiums as low as possible to the insured, a screening process is completed before an insurance contract is completed

7. Automobile Insurance: The Basics What is the insurance company looking for? Some vehicles, and some drivers, carry more risk than others Low risks will be charged a lower premiumLow risks will be charged a lower premium High risks will be charged a higher premiumHigh risks will be charged a higher premium

8. Automobile Insurance: The Basics What determines your premium— how much you pay? AgeGender Vehicle Type Driving Record Geographic Location

9. What is a Deductible? This is the amount per accident that you pay out of pocket before insurance starts to pay Common deductible amounts are usually $250, $500, and $1000 The higher the deductible amount you pay the lower your premiums are

10. Car Insurance Covers: Automobile Insurance: The Policy Liability Coverage –I njuries to people & property –100/300/50 (check book p 225) Medical Coverage –Pays your own medical expenses from car accident –Pays medical bills for passenger in your car Collision Coverage –Pays for damage to your own car Uninsured Motorist Coverage –Pays you for the personal injuries or damage from other drivers who do NOT have insurance or ENOUGH insurance No-Fault Insurance –Minnesota is a No-Fault state –YOUR insurance pays for injuries to you regardless of who is at fault—UP TO A CERTAIN AMOUNT--$4,000 –If loss is more than $4,000, a lawsuit can be filed to get paid if other driver is at fault.

11. Automobile Insurance: The Basics What can you do to reduce risk and lower premiums? Use your seatbelt Observe Speed Limits Know your own limits Concentrate on driving Be Patient Don’t Drink and Drive Get good grades