1. Automobile Insurance: The Basics

2. What is the likelihood you will be in an automobile accident? There are more than 12 million motor vehicle accidents annually The typical driver will have a near automobile accident one or two times per month The typical driver will be in a collision of some type on average of every 6 years Crashes are the leading cause of death for ages 3-33

3. Automobile Insurance: The Basics Even a minor accident can result in thousands of dollars in damages Damage to your carDamage to your car Damage to other cars involvedDamage to other cars involved Medical BillsMedical Bills Lost wagesLost wages Pain and sufferingPain and suffering ProsecutionProsecution Legal FeesLegal Fees FinesFines

4. Automobile Insurance: The Basics If you are in an accident how do you pay for it? Bank Account? Parents? Rich Uncle? Best Friend? Insurance?

5. Automobile Insurance: The Basics What is Automobile Insurance? An auto insurance policy is a contract between you and an insurance company. You pay a premium, and in exchange, the insurance company promises to pay for specific car-related financial losses during the term of the policy.

6. Why do I need auto insurance It’s the law!It’s the law! There are risks you can’t afford to takeThere are risks you can’t afford to take What happens if…What happens if… –You’re involved in a crash that causes property damage? –You hurt yourself or someone else? –Your car is damaged when you’re not driving it? (by weather, vandalism or a hit-and-run) –Your car is stolen? –Your car breaks down and needs to be towed?

7. Automobile Insurance: The Basics Are you a risk to the insurance company? To keep premiums as low as possible to the insured, a screening process is completed before an insurance contract is completed

8. Automobile Insurance: The Basics What is the insurance company looking for? Some vehicles, and some drivers, carry more risk than others Low risks will be charged a lower premiumLow risks will be charged a lower premium High risks will be charged a higher premiumHigh risks will be charged a higher premium

9. Automobile Insurance: The Basics What determines your premium? AgeGender Vehicle Type Driving Record Geographic Location

10. What is a Deductible? This is the amount per accident that you pay out of pocket before insurance starts to pay Common deductible amounts are usually $250, $500, and $1000 The higher the deductible amount you pay the lower your premiums are

11. Automobile Insurance: The Policy A common mistake when shopping for automobile insurance is looking only at the price between two policies Policies differ from policy to policy and company to company

12. Five parts to an insurance policy DeclarationsCoveragesExclusionsConditionsDefinitions Automobile Insurance: The Policy

13. Automobile Insurance: The Basics What can you do to reduce risk and lower premiums? Use your seatbelt Observe Speed Limits Know your own limits Concentrate on driving Be Patient Don’t Drink and Drive Get good grades