1. Automobile Insurance: The Basics

2. What is the likelihood you will be in an automobile accident?
Automobile Insurance: The Basics
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 car
Damage to other cars involved
Medical Bills
Lost wages
Pain and suffering
Prosecution
Legal Fees
Fines

4. Automobile Insurance: The Basics
If you are in an accident how do you pay for it?
Bank Account?
Parents?
Rich Uncle?
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!
There are risks you can’t afford to take
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. Are you a risk to the insurance company?
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. What is the insurance company looking for?
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 premium
High risks will be charged a higher premium

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

10. Types of Automobile Insurance Coverages
Three Questions
What are third-party coverages?
What are first-party injury coverages?
3. What are first-party property coverages?

11. Types of Automobile Insurance Coverages
What are third-party coverages?
Bodily Injury Liability
People costs (medical expenses, lost wages, pain and suffering)
Property Damage Liability
Things (other cars and property)
Both are types of coverage required by law in most states

12. Types of Automobile Insurance Coverages
What are first-party injury coverages?
Medical Payments (MedPay)
Covers medical and funeral expenses resulting from accidents with your vehicle
Personal Injury Protection (PIP)
Extends MedPay to include lost wages
Uninsured Motorists
Covers expenses if the at fault driver does not have coverage
Underinsured Motorists
Covers expenses when the at fault driver does not have enough coverage

13. Types of Automobile Insurance Coverages
What are first-party property coverages?
Comprehensive
Compensates you for physical damage to your car, including theft, vandalism, natural disasters
Collision
Pays for damage to your vehicle in case of collision
Both Coverages require you to pay a deductible

14. 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

15. 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

16. Automobile Insurance: The Policy
Five parts to an insurance policy
Declarations
Coverages
Exclusions
Conditions
Definitions

17. Automobile Insurance: Accidents
Chances are even if you are never in an accident you will witness one
What should you do if you are involved in an accident?

18. Steps to take after an accident
Help anyone who is injured
You have an ethical and legal responsibility
Notify the police
Prevent further accidents
Protect the accident scene
Record information
Exchange information with the parties involved
Take note of time, location, weather, and road conditions

19. Filing a Claim
It is important that the accident is reported promptly to the insurance agent or company
The policy will guide the insured on the correct steps to take to report the claim
The company will guide the insured through the process

20. Filing a Claim When you are liable for an accident
The insurance company covers the loss up to the policy limits
Your insurer represents you if you are sued
Your insurer has the right to settle any legal action without your permission
Your premium may rise
Insurer has the right to cancel your policy
If the losses exceed the policy provisions, the insured is responsible to cover the excess

21. What can you do to reduce risk and lower premiums?
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