Automobile Insurance

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					Automobile Insurance
             Auto Insurance
• Fixing damage to a car is expensive!
• Damage or injury caused by a car can
  result in medical expenses and lawsuits
  that could bankrupt you!
• Protect yourself with auto insurance
  – In most states, you can’t legally drive without
 Bodily Injury Liability Coverage
• Protects you when you are legally at fault
  for injuring other people in an accident
• 250/500 means:
  – $250,000 maximum for injuries to any ONE
    person in an accident
  – $500,000 maximum for all injuries to other
    people in an accident
     Property Damage Liability
• Pays for damage you caused to another
  person’s property
  – Not damages to your car
• 250/500/50
  – 50 means the insurance company will pay up
    to $50,000 for property damage to another
    person’s property in an accident
  Medical Payments Coverage
• Pays medical and funeral expenses for
  you, your family members, and other
  passengers in your car because of injuries
  sustained in an accident
  – No matter who was at fault
 Uninsured/Underinsured Motorist
• Pays medical and
  damage expenses for
  you and your
  passengers caused
  by a driver without
  – Or too little insurance
    to cover your loss
    Comprehensive Coverage
• Pays for damage to
  your car caused by
  something other than
  a collision
  – Earthquake, fire, wind,
    hail, floods
  – Vandalism, theft
         Collision Coverage
• Pays for damage to your car caused by
  colliding with another car or object
  – Tree, fire hydrant
  – Most expensive part of an auto policy
• Deductible
  – The amount you pay before the insurance
    company pays anything
  – Comprehensive and collision coverage carry
    a deductible
  How Much Should You Buy?
• Illinois legal minimum
  – 20/40/15
• What do these numbers mean?
• Is it enough??
• Recommended minimums
  – 50/100/25
• Should 1982 Ford Escort purchase
  collision coverage?
         Higher or Lower Risk?
•   Young males           •   Rural area
•   Young females         •   Sports car
•   Male < 21 years old   •   Luxury car
•   Married               •   Many claims
•   Single                •   Many traffic violations
•   Urban area
             Driving Record
• When you receive a ticket or cause an
  accident, points may be added to your
  driving record
  – Points increase your premiums
• If no one will insure you, your state will
  assign you to a insurance company
  – Assigned risk
  – Very high premiums!

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