1. Vehicle Insurance Chapter 33

2. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Basics Bodily Injury Liability Property Damage Liability Collision Insurance Medical Payments Coverage Comprehensive Coverage Uninsured Motorist Protection Miscellaneous Coverage Insurance – paid protection against losses due to injury or property damage Policy – contract between ins co and policyholder that explains amt/types of coverage Insurer – issues the policy Policyholder – buyer of the policy Liability insurance – most basic type of coverage; protects you from claims of injury/property damage to others

3. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Basics Bodily Injury Liability Property Damage Liability Collision Insurance Medical Payments Coverage Comprehensive Coverage Uninsured Motorist Protection Miscellaneous Coverage Bodily Injury Liability ins covers injuries to someone else. Stated in thousands of dollars 1 st figure -> injuries to one person 2 nd figure -> total for one accident Example: 100/300 bodily injury: $100,000 for injuries to one person $300,000 for all claims

4. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Basics Bodily Injury Liability Property Damage Liability Collision Insurance Medical Payments Coverage Comprehensive Coverage Uninsured Motorist Protection Miscellaneous Coverage Property Damage Liability ins covers damage to another person’s vehicle/property (also covers telephone poles, signs, etc.) Policy might quote all liabilities together Example 100/300/50 $100,000 for injuries to one person $300,000 for all claims $50,000 for property damage

5. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Basics Bodily Injury Liability Property Damage Liability Collision Insurance Medical Payments Coverage Comprehensive Coverage Uninsured Motorist Protection Miscellaneous Coverage Collision insurance covers damages to your own vehicle Max amt covered based on actual cash value of your vehicle, which is orig value minus depreciation Depreciation – decline in value of a vehicle because of use

6. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Basics Bodily Injury Liability Property Damage Liability Collision Insurance Medical Payments Coverage Comprehensive Coverage Uninsured Motorist Protection Miscellaneous Coverage Medical payments coverage is also called personal injury protection Covers injuries to you or anyone else in your car Typical coverage: $5,000 -$10,000

7. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Basics Bodily Injury Liability Property Damage Liability Collision Insurance Medical Payments Coverage Comprehensive Coverage Uninsured Motorist Protection Miscellaneous Coverage Comprehensive coverage covers damage to a policyholder’s vehicle caused by things other than a car accident Examples: falling objects, theft, flood damage, vandalism Will not cover more than the actual value of the car

8. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Basics Bodily Injury Liability Property Damage Liability Collision Insurance Medical Payments Coverage Comprehensive Coverage Uninsured Motorist Protection Miscellaneous Coverage Uninsured motorist protection covers you from people who can’t pay insurance claims Anyone riding with you is also protected If you’re hit by a vehicle while walking you are also covered Most states require this

9. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Basics Bodily Injury Liability Property Damage Liability Collision Insurance Medical Payments Coverage Comprehensive Coverage Uninsured Motorist Protection Miscellaneous Coverage Other types of protection: Coverage for a rental car Cost of towing Coverage for others who use your car Add a work vehicle to your policy Motorcyclists, motor scooters, and snowmobiles need insurance too

10. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Financial Responsibility Law Compulsory Insurance Law No-Fault Insurance Laws States have laws requiring drivers to show proof that they can pay for any injuries or damages they may cause Also protects you from other drivers Laws vary state to state

11. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Laws Financial responsibility law – says you must pay for any damage or injury you cause in an accident either with insurance, savings or by selling property If you can’t pay, you can be sued, lose your license, or lose your car Financial Responsibility Law Compulsory Insurance Law No-Fault Insurance

12. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Laws Compulsory insurance law – legally requires drivers to have a minimum amt of car ins You must show proof of insurance before you can get a license or register your car Police also ask for insurance when you get pulled over Financial Responsibility Law Compulsory Insurance Law No-Fault Insurance

13. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Laws No-fault insurance – law that requires drivers involved in accidents to collect damages from their own insurance companies no matter who is at fault When there is a dispute about who is at fault Financial Responsibility Law Compulsory Insurance Law No-Fault Insurance

14. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Costs Insurance Premiums Deductible Factors Type Of Vehicle Location Driver Classification Driving Record The average annual car insurance cost: $1,200 Cost of insurance is directly affected by the amount insurers pay out in claims Claim – a request for payment from an insurer for any damages covered by a policy The more they pay, the more we pay

15. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Costs Insurance Premiums Deductible Factors Type Of Vehicle Location Driver Classification Driving Record Premium – amt an insurance company charges a policyholder for an insurance policy Premium covers policyholder for a period, usually a year, and then is renewed Insurer can cancel a policy or refuse coverage

16. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Costs Insurance Premiums Deductible Factors Type Of Vehicle Location Driver Classification Driving Record Deductible – an amount in damages a policyholder must pay before the insurance company pays anything Makes you responsible for small losses and the insurer helps pay for the larger losses

17. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Costs Insurance Premiums Deductible Factors Type Of Vehicle Location Driver Classification Driving Record Factors that affect the cost of insurance: Claims paid out Amount of coverage Amount of deductible Type of vehicle Vehicle usage Geographic location Age

18. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Costs Insurance Premiums Deductible Factors Type Of Vehicle Location Driver Classification Driving Record Premium will vary according to: Make Model Year New cars and cars with expensive parts are more expensive to insure

19. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Costs Insurance Premiums Deductible Factors Type Of Vehicle Location Driver Classification Driving Record Where you live affects your premium Area w/ high crime rate/vandalism/theft will be higher City drivers more expensive than rural

20. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Costs Insurance Premiums Deductible Factors Type Of Vehicle Location Driver Classification Driving Record Driver classification includes factors like: Age Gender Marital Status 70 have more accidents Young men > young women

21. Types of Vehicle InsuranceLaws on Vehicle InsuranceThe Costs of Insurance Costs Insurance Premiums Deductible Factors Type Of Vehicle Location Driver Classification Driving Record Major factor: driving record Accidents/traffic violations = higher premiums Drivers education course/good grades = lower premiums