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. 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

11. 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

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

13. 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