AUTOMOBILE INSURANCE Chapters 33 autoquiz_DSL.wmv

INSURANCE is… A way to manage financial risk Intended to cover financial losses due to accidents Insurance companies provide a risk management service To 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 Insurance 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

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, Minnesota New 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