Transcript Vehicle Insurance

Vehicle Insurance
Chapter 38
Economic Risks of
Owning a Car

Risks
– Accident
 Damage to yourself
 Damage to your vehicle
 Damage to others
 Damage to others property
– You can buy insurance to protect yourself from
the financial loss caused by almost anything
that could happen to your car.
Auto Liability Insurance
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Automobile Liability Insurance – this is the
insurance that you can buy in order to
protect yourself against financial loss if you
injure someone else or damage someone
else’s property.
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This will also cover your defense in a court
hearing, to determine who is at fault in an
automobile accident.
Types of Coverage

Personal Injury Coverage
– Bodily Injury Liability
– Medical Payments
– Uninsured Motorist Protection

Property Damage Coverage
– Property Damage Liability
– Collision Insurance
– Comprehensive Physical Damage
Personal Injury Coverage

Bodily Injury Liability Protection
– Protects the insured from claims resulting from injuries
or deaths for which the insured is found to be at fault.
– Covers people in other cars, passengers riding with the
insured, and pedestrians.
– It does not cover the insured or, in most cases, the
insured’s immediate family

This is normally expressed in a fraction…
– 100/300
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$100,000 of coverage for if just one person is hurt, while the
300 indicates $300,000 is the maximum amount which the
company will pay for the accident altogether.
Personal Injury Coverage

Medical Payments Protection
– Policyholders and their family members are
covered if they are injured while riding in their
car or in someone else’s car.
– This will also cover a pedestrian hit by a car.
– Medical payments that are covered would be
that of medical, dental, ambulance, hospital,
nursing and funeral services.
Personal Injury Coverage

Uninsured Motorist Protection
– Protects against uninsured drivers or drivers
who have no money to pay claims.
– Also protects against damage caused by a
hit-and-run accident
– This is only used if the uninsured motorist is
found to be at fault.
– This will only be sold in a policy which does
have bodily injury liability.
Personal Damage Coverage

Property Damage Liability –
– Protects the insured against claims if the
insured’s car damages someone else’s property
and the insured is at fault
– This covers property such as another car,
telephone poles, fire hydrants, and buildings
– This does not cover the insured’s car
Personal Damage Coverage

Collision Insurance –
– Protects against a car owner against financial
loss associated with damage resulting from a
collision with another car or object or from the
car turning over.
– This type of insurance includes a deductible
clause.
– If the cost of a collision is more than the cost of
the car, the company only pays the cost of the
car.
Personal Damage Coverage
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Comprehensive Coverage
– Protects the insured against almost all damage
losses except those cause from a collision or
from the car turning over.
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Fire, Tornado, Windstorm, Vandalism, Falling
Objects, Hail, and Theft.
– The estimated value of the car is what the
insurance company would pay, in the event the
car was totally destroyed or if the car was
stolen.
Buying Automobile Insurance
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Insurance Rates
– Some factors which are considered when
figuring the cost of auto insurance…
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The purpose for which you drive your car.
The number of miles you drive your car each year.
The value and type of your car.
The community in which you live in.
Types of coverage and deductibles.
Vehicle Insurance Laws

Compulsory Insurance Laws
– This requires you to carry certain types of
automobile insurance before your car can be
licensed.
– You can not register a car or get a license to
drive without providing proof of having
minimum amounts of insurance coverage
required.
Vehicle Insurance Laws

Financial Responsibility Laws –
– This laws says that if you cause an accident, and you
are unable to pay for the damages either through
insurance, your savings, or the sale of property, your
driver’s license will be suspended or taken away.
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Assigned Risk Plans –
– Each insurance company in the state must sell liability
insurance to a fair share of the high risk drivers.
– This “fair share” is determined by the amount of
insurance the company sells per year.
Vehicle Insurance Laws
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No-Fault Insurance Laws –
– In an effort to speed up the payment of claims
and reduce the hardship of long delays this law
requires that you get compensated for your
losses, from your own insurance company, no
matter who is at fault.