1. Automobile Insurance: The Basics

2. What is the likelihood you will be in an automobile accident? 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 be in a collision of some type on average of every 6 years Crashes are the leading cause of death for ages 3-33

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 If you are in an accident how do you pay for it? Bank Account? Parents? Rich Aunt? Best Friend? Insurance?

5. 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.

6. 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?

7. 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

8. 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

9. Automobile Insurance: The Basics What determines your premium? AgeGender Vehicle Type Driving Record Geographic Location

10. The basics There are two types of liability coverage. Both are required by law. Bodily injury liability: If someone is injured as a result of an auto accident you caused, this coverage could help pay for your legal fees, as well as the person's medical bills and lost wages. This coverage often includes two separate limits: one that applies to each injured person ($50,000, for instance) and a second one that applies to each accident (for instance, $100,000).

11. The basics Property damage liability: If you damage another person's property, such as a fence or garage door, with your vehicle, this coverage can help protect you. Property damage coverage may help reimburse the other party for their losses, so you don't have to pay for them out of your own pocket.

12. Medical payments: this coverage may help pay for your medical bills related to a car accident. However, this coverage also extends to your passengers and a family member who was driving the car when the accident occurred. Also, if you or a family member are injured in another car or as a pedestrian, this coverage can help pay for medical expenses.

13. Liability Insurance Uninsured/underinsured motorist: This coverage can help protect you if you're hit by a driver who has no auto insurance or whose policy limits are too low to cover the accident's full costs. It can help pay for your medical bills and possibly for damage to your vehicle.

14. Coverage That Helps Protect Your Vehicle Collision: If you need to repair or replace your vehicle after a collision with another car or object, this coverage can help cover the costs. Comprehensive: This coverage can help pay for damage to your car that isn't related to an auto accident. Examples: theft, damage by animals, fire or falling objects.

16. To Protect your vehicle Guaranteed Asset Protection (GAP): If your vehicle is totaled in an accident or stolen, you insurance company typically will pay you fair-market value for the car. However, if you still owe a financial institution more than the car is worth, GAP coverage can help reimburse you for the cost difference.

17. What is the minimum? 15/30/5 Only get the minimum if you absolutely can’t afford anything else. How many cars do you know that only cost $5K?

18. 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

19. Automobile Insurance: The Policy A common mistake when shopping for automobile insurance is looking only at the price between two policies Policies differ from policy to policy and company to company

20. Five parts to an insurance policy DeclarationsCoveragesExclusionsConditionsDefinitions Automobile Insurance: The Policy

21. 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

22. Other Ways Your rate is lowered by: –Bundling –Getting married –Low mileage commute –Get older –Buy a safe car –Buy a house –No accidents or tickets

23. How do I buy Insurance? Through an agent –Go online and type…buy auto insurance –DON’T pay a broker fee!!! Direct –Go online and type…online auto insurance companies –EX. Esurance.com

24. In an accident? First, don't reveal your policy limits or admit fault to anyone Collect the following information: Names, phone numbers, addresses and email addresses of all occupants and witnesses Location Photos of the accident scene and all vehicles involved Company name, policy number and phone number for other insurance companies Call the police if there are injuries If emergency services respond: police report number, phone number, officer name and badge number, etc.

25. Make a claim If you have an agent call them…they will ask you a lot of questions about the accident and file the claim. Takes about 40 minutes. Go online to your company’s website and click on “file a claim.” Answer the questions truthfully. Use the company’s APP

26. Insurance If you move out of your parent’s house you need to get your own insurance…or, check with the company to see if it is o.k. to stay on the policy at a different address –Don’t lie about where you live or who owns the car. That is fraud and make the policy void Going to the military? –Get insurance thorough USAA Going to college: –Stay on your parent’s policy. Tell them where you are going.

27. Here are some times in your life when you'll definitely want to re-evaluate your insurance needs: You're getting married or divorced You're starting a family You're renting an apartment You're buying a house or a car, or making a major purchase Your child is going off to college You're starting a new job or becoming self-employed You're buying or selling a business Your income increases or decreases substantially You're taking care of an aging parent You're retiring