AUTOMOBILE INSURANCE

Chapters 33

autoquiz_DSL.wmv

INSURANCE is…

A way to manage financial riskIntended to cover financial losses due to

accidentsInsurance companies provide a risk

management serviceTo buy insurance , you must have an

insurable interest

Basic Vocabulary

• Insurance is paid protection against losses due to injury or property damage.

• To get insurance, you have to purchase a contract called a policy from an insurance company.

• The policy states your protection, costs, rights, and responsibilities

Basic Vocabulary

• The insurance company – insurer

• The policy holder – insured

Vehicle Insurance

Liability insurance protects against claims for injuries or

property damage to others when you are responsible.

Types of Coverage

Laws on InsuranceGraphic OrganizerAutomobile LiabilityAutomobile LiabilityInsurance CoverageInsurance Coverage

Graphic OrganizerGraphic Organizer

Indicates $100,000limit that will bepaid to one personin an accident.

Indicates $100,000limit that will bepaid to one personin an accident.

Indicates $50,000limit for paymentfor damage to theproperty of others.

Indicates $50,000limit for paymentfor damage to theproperty of others.

Indicates $300,000limit that will bepaid to all personsin an accident.

Indicates $300,000limit that will bepaid to all personsin an accident.

100 / 300 / 50

Bodily Injury LiabilityProperty Damage

Liability

Laws on Vehicle Insurance

A financial responsibility law says you must pay for any damage or injury you cause in an accident either with insurance, with savings, or by selling property.

Laws on Vehicle Insurance

A compulsory insurance law legally requires drivers to have a minimum amount of car insurance.

Also known as mandatory insurance.

Bodily Injury Liability and Property Damage Liability.

Laws on Vehicle Insurance

No-fault insurance requires drivers involved in accidents to collect damages from their own insurance companies no matter who is at fault.Florida, Hawaii, Kansas, Kentucky,

Massachusetts, Michigan, MinnesotaNew Jersey, New York, North Dakota,

Pennsylvania, and Utah

The Costs of Insurance

A claim is a request for payment from an insurer for any damages covered by a policy.

The amount an insurance company charges a policyholder for an insurance policy is called the premium. Can cancel or refuse a policy for too many

accidents.

The Costs of Insurance

A deductible is an amount in damages a policyholder must pay before the insurance company pays anything.

The higher the deductible the lower the premiums.

Factors Affecting the Cost

Specific Factors:

Type of Vehicle – make, model, & year

Location – where you live, crime

Driver Classification – age, gender, & martial status

Driving Record – accidents or traffic violations