V EHICLE I NSURANCE Chapter 14, 14-2

A BOUT THE R ISKS  All states have a financial responsibility law. This means you will be held responsible for damage you cause to other people and their property.  This may be satisfied through the suspension of your license, and the possession of your property and savings.

C OMPULSORY INSURANCE Some states require you have a minimum amount of insurance to obtain a license.

P ERSONAL INJURY COVERAGE — BODILY INJURY Includes:  bodily injury (protects your from claims of injury or death when you are at fault).  Covers people in other cars and pedestrians.  Expressed as a fraction, numbers show limit insurance will pay out to one person, and maximum of total claim in thousands of dollars.  Ex. 100/300  Medical Payments Protection (covers injury to policy holder and family) no matter who is at fault.  Uninsured Motorist Protection (protects policyholder if person at fault has no insurance.  There is also underinsured motorist coverage.

P ROPERTY DAMAGE COVERAGE  Property damage liability covers you if you damage someone else’s property (usually the other person’s car).  Does not cover damage to your own car.  Collision insurance protects against financial loss from a collision.  Often comes with a deductible  Comprehensive coverage covers loss from things like fire, flood, theft or vandalism.

N O FAULT INSURANCE LAWS This means regardless of who is at fault, you collect from your own insurance company. This speeds up the claim process and reduces the cost of insurance.

I NSURANCE R ATES — FACTORS THAT AFFECT WHAT YOU PAY Age Accident record Marital status Academic standing Credit rating Purpose of vehicle Number of miles driven Value and type of car Community you live in Amount of coverage and deductibles

R EDUCING YOUR INSURANCE COSTS Things that could help: taking a drivers ed course good grades good driving record using same company and plan as parents