auto insurance. pop quiz!!!! get out pencil and paper!

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Auto Insurance

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Page 1: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Auto Insurance

Page 2: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

POP QUIZ!!!!GET OUT PENCIL AND PAPER!

Page 3: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

What Is Auto Insurance?

Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.

Auto insurance provides property, liability and medical coverage

Page 4: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!
Page 5: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Basic Auto Coverage

Bodily Injury Liability This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.

Page 6: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!
Page 7: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Basic Auto Coverage

Medical Payments or Personal Injury Protection (PIP) This coverage pays for the treatment of injuries to the driver and passengers of the policyholder's car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

Page 8: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Safe Happens!

Page 9: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Basic Auto Coverage

Property Damage Liability This coverage pays for damage you may cause to someone else's property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.

Page 10: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!
Page 11: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Basic Auto Coverage

Collision This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000—the higher your deductible, the lower your premium.

Page 12: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Physical Damage Insurance continued

2. Collision Coverage – covers a collision with another object, car, or from a rollover

Paid regardless of fault Generally covered when driving someone else’s

car with their permission

Page 13: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!
Page 14: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Basic Auto Coverage

ComprehensiveThis coverage reimburses you for loss due to theft or damage caused by something other than a collision, such as fire, falling objects, windstorm, hail, flood, vandalism, or deer.

States do not require that you purchase collision, but if you have a car loan, your lender may insist you carry it until your loan is paid off.

Page 15: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Physical Damage Insurance

1. Comprehensive Coverage – includes all physical damage losses except collision and other specified losses. Usually includes deductible. Losses covered include:

Theft, vandalism Fire, ice, windstorm, or hail Glass breakage Contact with animal

Page 16: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!
Page 17: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Basic Auto Coverage

Uninsured and Underinsured Motorist Coverage This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.

Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.

Page 18: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Liability Insurance continued

Policy limits for liability are usually quoted with three figures such as 25/50/10 Each figure represents a multiple of $1,000

25 = $25,000 Per-person bodily injury limit $25,000 is the most which will be paid for any one

person’s bodily injury liability losses from an accident

Page 19: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Liability Insurance continued

50 = $50,000 Per-accident bodily injury limit $50,000 is the most which will be paid for all

bodily injury losses from an accident 10 = $10,000

Per-accident property damage liability limit $10,000 is the most which will be paid in

property damage liability from an accident

Page 20: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Insurance Rate Influences

Insurance rates are determined for individual cases – these factors influence the rates:

Age People under age 25 pay higher premiums

Gender Men have more accidents, rates may be higher

Marital status Married drivers have fewer accidents, so rates are

lower

Page 21: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Influences continued

Driving record Safe drivers have lower rates Number and type of tickets will raise rates Number and severity of accidents will raise

rates Type and age of vehicle

Newer, more expensive, and higher repair cost vehicles have higher rates

Frequently stolen vehicles have higher rates Color of vehicle does not matter

Page 22: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Influences continued

Vehicle use Rates are usually higher when driving more than

7,500 miles a year The more one drives, the greater the chance of an

accident

Place of Residence Rates vary among states

People in large cities usually pay more than in rural or suburban areas

Weather conditions may affect rates

Page 23: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Influences continued

Number of drivers on the policy Additional drivers raise the premium Costs a driver under the age of 25 less to be

added to his/her parents’ policy than to purchase a separate policy

Driver training May receive a discount for having taken a

driver’s education course

Page 24: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Influences continued

Good student discount May receive a discount for good

grades in school Multiple car discount

May receive a discount for having two or more vehicles on the same policy

Anti-theft systems May receive a discount for anti-theft devices such

as car alarms

Page 25: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Influences continued

Multiple policies with the same company Having both auto and

home insurance

Long-time customers Some companies

might offer discounts to long-time customers

Page 26: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Review

What are the 5 basic components of auto coverage?

What does COLLISION cover? What does COMPREHENSIVE cover? What does PERSONAL INJURY cover? What does PROPERTY LIABILITY cover? What does UNDER/UNINSURED cover?

Page 27: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Life insurance

A contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insured’s death

Beneficiary - is the recipient of any policy proceeds if the insured person dies

Dependent - a person who relies on someone financially

Page 28: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Types of life Insurance

Term and Whole Term - covers policyholders for a fixed span

of time. Can last up to 30 years. Whole - combines term insurance with an

investment component Should have 2 - 3 times your annual salary.

Can talk to a financial advisor for exact amount.

Page 29: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Renters insurance

Covers personal property - not the physical residence

Liability protection against accidental occurrences

Inexpensive

Page 30: Auto Insurance. POP QUIZ!!!! GET OUT PENCIL AND PAPER!

Disability Insurance

Short Term Disability - waiting period of 0-14 days up to 2 years

Long Term Disability - Waiting period of weeks to months up to few years or rest of life

Noncancelable - cannot be canceled by the insurance company except for nonpayment

Guaranteed renewable - right to renew with the same benefits, however, the insurer has the right to increase your premiums.