WHY BUY IT?? VEHICLE INSURANCE

Why It’s Important Most states require you to have some form of vehicle insurance. To get the best value, you need to know the choices in coverage and the costs of insurance.

Types of Vehicle Insurance Insurance

Types of Vehicle Insurance The company that issues the policy is called the insurer. The buyer of the policy is called the policyholder.

Types of Vehicle Insurance The types of vehicle insurance protection are: continued

Types of Vehicle Insurance

Figure 33.1 TYPES OF VEHICLE INSURANCE COVERAGE The kinds of vehicle insurance coverage listed here are often included in a single policy or package policy. Which types cover injuries, and which types cover only property damage?

Types of Vehicle Insurance Liability insurance

Bodily Injury Liability Bodily injury liability insurance covers injuries to someone else.

Bodily Injury Liability

Property Damage Liability

Collision Insurance Collision insurance covers damages to your own vehicle.

Collision Insurance The maximum amount covered is based on the actual cash value of your vehicle, which is the value of the car when it’s new minus depreciation. Depreciation

Medical Payments Coverage Medical payments coverage is also called personal injury protection. It covers injuries to you and anyone else in your car.

Comprehensive Coverage

Comprehensive insurance covers losses from falling objects, theft, flood damage, vandalism, and other causes.

Comprehensive Coverage Like collision coverage, comprehensive coverage will not cover more than the actual cash value of your car.

Uninsured Motorist

Miscellaneous Coverage Other things insurance will cover are:

Graphic Organizer Automobile Liability Insurance Coverage Graphic Organizer Indicates $100,000 limit that will be paid to one person in an accident. Indicates $100,000 limit that will be paid to one person in an accident. Indicates $50,000 limit for payment for damage to the property of others. Indicates $50,000 limit for payment for damage to the property of others. Indicates $300,000 limit that will be paid to all persons in an accident. Indicates $300,000 limit that will be paid to all persons in an accident. 100 / 300 / 50 Bodily Injury Liability Property Damage Liability

Financial Responsibility Law A financial responsibility law

Compulsory Insurance Law A compulsory insurance law

Compulsory Insurance Law If you can’t show proof of insurance, you can have your license or registration taken away from you.

No-Fault Insurance No-fault insurance

The Costs of Insurance The costs of insurance are directly affected by the amount of money insurers pay each year in insurance claims.

The Costs of Insurance A claim

Figure 33.2 SPECIFICS OF AN INSURANCE POLICY The amount of coverage you want and the amount of your deductible determines the basic cost of your premium. If the policyholder has a claim under comprehensive coverage, how much must he or she pay before the insurance company pays? How much must the policyholder pay first in case of a collision?

Insurance Premiums premium.

Insurance Premiums An insurance company can cancel a policy or refuse coverage for someone with a record of accidents.

Deductible A deductible

Deductible A deductible makes you responsible for small losses and the insurance helps pay for the larger losses.

Factors Affecting the Costs of Insurance There are a variety of specific factors that affect the cost of your premium.

Type of Vehicle The amount of your premium will vary according to the make, model, and year of the vehicle you drive.

Type of Vehicle

Location The area where you live has an affect on your insurance premium. If you live in an area with a high crime rate, your premium will be higher than in areas with a lower crime rate.

Location

Driver Classification Driver classification includes factors like your age, gender, and marital status.

Driver Classification

Driving Record

Younger drivers have a problem because they usually haven’t been driving long enough to establish a good driving record.

Driving Record