1. Chapter 11 Insurance

2. Concept of Insurance $500/year homeowner’s policy will pay $1000 house or $500,000 lawsuit –Relatively small amount compared to a large financial loss

3. Types of Insurance Homeowners Life Health Renters Dental Car

4. Financial Responsibility In NC, you are required to prove financial responsibility in order to legally operate a motor vehicle

5. Financial Responsibility Proof Post a cash bond (in effect, self insuring you and your company) Buy liability insurance

6. Personal Injury Liability Owner/driver against having to pay for injuries they caused to others –$60,000 per accident is minimum in NC This is not adequate if someone is seriously hurt 100/300 or 300/300 might be a better choice

7. Property Damage Liability Damage you do to another’s property –Car, house, yard, mailbox –Minimum $25,000 in NC (for about $4 more per year $50,000

8. DL 123 Form Filled out by insurance agent proving of liability coverage

9. Collision Coverage Insurance Protects your car when you are at fault –Will pay up to book value of your car –For a lower premium, deductibles are available- $250 up to $1000- deductible is what you pay first –Collision is required if you lease or borrow money

10. Comprehensive Insurance Repairs your vehicle form “acts of God”, theft, vandalism, deer damaging car –Required for loan or lease –Will pay up to value of car

11. Medical Payments Insurance Pays for you and your passengers medical bills –$10,000 is currently the max in NC –Pays for minor injuries, ER, ambulance

12. Uninsured Motorist Insurance Owner/driver against another driver, at fault, not having any insurance –Your company will pay for your car and injuries up to limit of the policy

13. Underinsured Motorist Insurance Protects the owner/driver in the event the other driver (at fault) has insurance but not enough to cover –Your company pays what theirs does not up to limit of policy

14. Towing Insurance Pays if it is necessary to tow your car after a wreck or breakdown –Max is $50 and does not cover if car is illegally parked

15. Rental Reimbursement Coverage Pays for a rental while yours is being repaired under collision coverage –Not required

16. No Fault Insurance NC does not have But if you run into someone from a state with this coverage, their company will pay if their policy holder is at fault

17. Rental Car Coverage If you rent a car, your comprehensive and collision on your car will cover the rental at no extra charge

18. Insurance Points used for Rates 1 pt is 15% 2 pts is 40% 3 pts is 65% 4 pts is 90% 5 pts is 120% 6 pts is 150% 7pts is 180% Passing a stopped school bus is 120% increase on your premiums

19. Insurance Rate Factors Driving rate What the vehicle is used for Where you live and drive Driving experience (inexperience 150% 1 st two year and 100% third year) More than one car you get 20%discount The amount of coverage Type of vehicle insured Being a high risk driver

20. In NC, insurance are not based on: Age Gender Marital status Grades Driver education Color of vehicle

21. Rates are based on: Pleasure use only To work > 10 miles To work < 10 miles plus 20% For business +25% Farm use ----25%

22. Inexperience driver 150% for the first to years 100% the third year After three years experience the rates return to normal

23. Assigned Risk Facility 23% of NC drivers are insured through the reinsurance facility –Pay a third more for insurance –The only way out is to convince an insurance agent that you are no longer a risk

24. Recoup Surcharge Pay for losses in the reinsurance facility Each year all the premiums paid in and the judgments paid out must equal when high risk drivers cause more damage than their premiums can cover, the rest of the policyholders in NC have to make up the difference

25. Insurance Points Waivers In NC, a less than 10 MPH over the speed limit ( 2 points) is no insurance points for the first offense in 3 years. A second violation results in revoking the waiver and receiving both violation points –Also allow a prayer for judgment once in 3 years

26. Insurance Rates Increase for 2 pts Increase premiums by 40% for three years –So a 10 MPH over ticket will cost you $300 in insurance premiums over the next 3 years

27. Insurance Rates for DWI 12 insurance points –$300/year to about $2800/year for three years –Comprehensive and collision are even more