Unit 6: Insurance Protecting What You Have Resources: NEFE High School Planning Program

Stuff You Should Consider… When first start to drive, best move – have your parents add you to their policy even if you have to pay them for your coverage Be sure that you know what you are covered for – Ask to see the policy Good idea to carry more insurance than the state’s minimum requirements Ask agent to help you decide the appropriate level of insurance for your situation

Main Types of Coverage… General Liability  Covers damage you did to other people’s property and bodily injury you cause to people outside of your car  Covers cost of repairing other car’s damages during an accident  Covered legal bills if someone sues you for injuring them

Main Types of Coverage… Medical Payments  Pays for medical bills for you and your passengers regardless of who is at fault  Also covers you and the members of your family in any accident involving an automobile, whether you are on foot, on a bicycle, or in a friend’s car

Main Types of Coverage… Collision  Covers repairs to your car caused by an accident – whether it is with another vehicle or with an object such as a tree or pole  Usually has a deductible – you pay the deductible amount first and the insurance company pays the amount over the deductible amount

Main Types of Coverage… Comprehensive (non-collision damage)  Covers fire-damage, vandalism, break-ins, theft  Covers damage caused by a natural disasters such as earthquake, hail, hurricane or flood  Covers everything except an actual collision

Main Types of Coverage… Uninsured Motorist  Covered damages by an auto that belongs to someone who does not have auto insurance

Main Types of Coverage… Underinsured Motorist  Covers you for the cost of repairs when the cost of the repairs from an accident by another driver is higher than his/her coverage limit

Main Types of Coverage… Optional Add-Ons  Towing  Renting a car while your car is being repaired

Conditions of An Insurance Policy Every insurance policy comes with conditions that define your rights, duties and responsibilities.  Example: You must perform certain actions in an event of a loss like contacting your insurance company promptly after an accident and providing honest information about what happened.

Conditions of An Insurance Policy Other Examples of Conditions  Informing insurer about any changes in your situation or vehicle  Insurance will not cover acts of war

Cancelation Policies  Be aware of cancelation provisions In most states insurer can only cancel your policy if you do not pay your premium, lose your driver’s license, lied on your insurance application or failed to report a substantial change in your circumstances – like buying a sports cars to replace a family sedan Your insurance company can refuse to renew your insurance policy for any reason.

“No-Fault” Insurance Provisions “A number of states have what’s called “no-fault” insurance provisions where insurance companies cover an insured’s personal injury claim regardless of who was at fault on the crash. However, accident victims can still sue the other party under certain conditions.” (Page 86)

Insurance Company Responsibilities Keeping you fully informed about your policy and your claims Treating your fairly Resolving complaints in a timely fashion Safeguarding your privacy

Make sure… you take the time to find out the conditions on your particular policy to prevent a situation where you call to make a claim and your insurer refuses to cover it because you have not fulfilled all of your obligations.

Time is on your side… As you get older, have more years of experience and maintain a clean driving record, your premiums tend to fall.

Strategies To Reduce Premiums Choose a high deductible - $250, $500, $1,000  Make sure you can afford to have the deductible that you chose Shop around

Strategies To Reduce Premiums Ask about discounts  Good grades  Driver’s Ed  Safety Features Drive less – example: mileage discount Move to a safer zip code Get married Keep your driving record clean  Speeding tickets/Moving violations

Making Sure That You’re Covered Two Ways To Buy Auto Insurance – Depends on Personal Preference  Insurance Agent Someone local to call if you have a problem/question or claim  Directly From the Insurance Company Reach someone at company 24 hours a day

The Internet and Insurance Before you provide any personal information via the internet to an insurance company, be sure that you are on a secure site. Make sure in comparing insurance policies that they are identical

Information That You Will Need Social security number How long you have had a valid driver’s license How you pay for your car Car’s vehicle identification number (VIN) Car’s year, make, model, body type, and safety equipment Current insurance company name (if applicable) Current liability coverage (if applicable) Policy expiration date (if applicable)

If You Have An Accident… Call your insurance agent or company right away Fill out a claim form (agent will help you with this); Provide accurate details Your agent may send someone out to evaluate your vehicle

If You Have An Accident… A claim adjuster will help work with you in order to resolve your claim; you may need to provide the adjuster with information like copies of your repair bills or medical expenses – Provide copies not originals The claim adjuster will make a recommendation to your insurance company about whether to pay the full claim, partial claim or nothing at all. Your insurance company will make a decision regarding your claim and let you know what it will cover and how much it will pay.

Revisiting the Decision-Making Process 1. Identify your goal. Do you want cheap, bare-bones coverage for your car, or would you rather have a lot of coverage so you don’t have to worry about paying for unexpected problems?

Revisiting the Decision-Making Process 2. Gather information. Who offers insurance in your state? What types and amounts of coverage do they recommend for you? What type and amount of insurance are they quoting you?

Revisiting the Decision-Making Process 3. Examine alternatives. How do the policies stack up in terms of cost? How much does the premium change if you increase or decrease your deductible? In the case of a claim, would you rather deal with an agent you know or call an 800 number?

Revisiting the Decision-Making Process 4. Analyze outcomes. How much will you need to add to your budgeted fixed expenses to pay for the insurance? How will you pay the deductible if you have an accident or experience another type of loss?

Revisiting the Decision-Making Process 5. Make a decision. Decide which insurance policy is the best one for you.

Revisiting the Decision-Making Process 6. Evaluate results. Periodically check around to see if you can get the same policy for better rates with another company. After you make a claim, consider how easy or hard the company was to work with. Also, as your car ages or your financial situation changes, you may want to re- evaluate your coverage limits and deductibles.