Docstoc

Car Insurance_1_

Document Sample
Car Insurance_1_ Powered By Docstoc
					Car Insurance
What it’s all about

(about 35 slides)

7 parts of car insurance
1. 2. 3. 4. 5. 6. 7. Bodily Injury Liability Property Damage Liability Medical Payments Collision Comprehensive Uninsured Motorist Towing and Road Service

Bodily Injury Liability
• You hurt another person’s body • You have to pay for their injuries because it was your fault—you are ―liable‖
– For example, you drive into someone who is walking in a crosswalk and break their leg

• You need Bodily Injury Liability insurance to pay the cost of their medical bills, pain and suffering.

Bodily Injury Liability
• Required by the state of California • You must buy Bodily Injury Liability insurance
– You must buy at least $15,000 of BI in case you hurt one person in an accident – You must also buy at least $30,000 of BI in case you hurt more than one person in an accident – This is called 15/30 BI insurance

Bodily Injury Liability
• Are you covered by BI insurance?
– You smash into another car and the other driver’s head is hurt
Yes, they are hurt and it’s your fault

Bodily Injury Liability
• Are you covered by BI insurance?
– You hit a dog and break it’s leg No, dogs are not people

Bodily Injury Liability
• Are you covered by BI insurance?
– You skid off the road and crack your head on the driver’s window No, BI covers other people you hurt, not you

Bodily Injury Liability
• Are you covered by BI insurance?
– You run into a telephone pole and your passenger gets a gash on their forearm
Yes, they are hurt; it’s your fault

Property Damage Liability
• You hurt another person’s property • You have to pay for their damage because it was your fault—you are ―liable‖
– For example, you crash into someone’s car

• You need Property Damage Liability insurance to cover the cost of repairing or replacing their property.

Property Damage Liability
• Required by the state of California • You must buy Property Damage Liability insurance
– You must buy at least $5,000 of PD in case you damage another person’s property

Liability Insurance, in general
Minimum required Bodily Injury Liability and Property Damage Liability is often referred to as: 15/30/5 insurance

$15,000 for hurting one person in an accident $30,000 for hurting all the people in an accident $5,000 for Property Damage These are minimum coverages. You will want to buy more than these minimum levels.

Property Damage Liability
• Are you covered by PD insurance?
– You skid off the road and crash into a wooden fence
Yes, you damaged someone else’s property—their fence

Property Damage Liability
• Are you covered by PD insurance?
– You are driving safely. A dog runs into the street and you hit it. The dog is hurt.
No, you are not at fault. Dogs are required by law to be under the control of their owners at all times. You are not liable.

Property Damage Liability
• Are you covered by PD insurance?
– You crash into the car in front of you. No one is hurt
Yes, you damaged someone else’s property—their car

Property Damage Liability
• Are you covered by PD insurance?
– You skid off the road and crash into small creek. Your car has $2,000 of damage.
No, you damaged your own property—not someone else’s

Medical Payments
• Pays for medical attention to anyone who is hurt while in your car—even you.
– For example, pays for ambulance, surgery, hospital, even prosthetic devices and funeral expenses

• NOT required by the state of California

Medical Payments
• Pays regardless of who was at fault • Even pays if you are not in a car at all— even if you are just a pedestrian and are hurt by a car • Only begins to pay after all other medical insurance you may have is exhausted

Collision
• Your car is damaged in a crash or ―upset‖ • Collision coverage will repair or replace your car up to the limits of your coverage or the value of your car
– By the way… What insurance covers the other guy’s car? – (Property Damage Liability)

Collision
• Your car is damaged in a crash or ―upset‖ • Collision coverage will repair or replace your car up to the limits of your coverage or the value of your car
– For example: you have $10,000 of collision insurance and your car is only worth $6,000. If you have a major crash, the insurance company will only pay $6,000 to replace your car

Collision
• Has a ―deductible‖
– You pay the deductible before the insurance begins to pay for the repair – For example: you have a $500 deductible and $2,000 of collision damage. You will pay $500 and the insurance company will pay the remaining $1,500

• Collision is NOT required by the state of California

Collision
• Are you covered by Collision insurance?
– A tree falls on your car while parked in a parking lot.
No, you were not in a collision—you did not run into anything.

Collision
• Are you covered by Collision insurance?
– You back into a fire hydrant and crumple your bumper
Yes, you ran into something—it was a collision

Collision
• Are you covered by Collision insurance?
– A block of wood flies out of the pickup truck in front of you and smashes into your windshield, cracking it
No, this is not considered a collision. We’ll learn more about this in a moment.

Collision
• Are you covered by Collision insurance?
– You are speeding around a turn, lose control, and your car flips over three times. Your car didn’t run into anything.
Yes, you were in an “upset” which is covered under collision

Comprehensive
• Your car is damaged by anything except collision or upset • Comprehensive includes things like falling objects, floods, fire, hail, theft, vandalism, and colliding with an animal. • NOT required by state of California

Comprehensive
• Has a ―deductible‖
– You pay the deductible before the insurance begins to pay for the repair – For example: you have a $1000 deductible and $3,000 of comprehensive damage. You will pay $1000 and the insurance company will pay the remaining $2,000

Comprehensive
• Are you covered by Comprehensive insurance?
– Your car is stolen
Yes, Comprehensive covers theft

Comprehensive
• Are you covered by Comprehensive insurance?
– You crash into your garbage can and dent up your bumper
No, this is a collision, not a comprehensive loss

Comprehensive
• Are you covered by Comprehensive insurance?
– A block of wood flies out of the pickup truck in front of you and smashes into your windshield, cracking it
Yes, Comprehensive covers falling objects

Comprehensive
• Are you covered by Comprehensive insurance?
– You skid off the road and drive into small creek. Your car has no dents but does have $2,000 of water damage.
Yes, Comprehensive covers flooding

Uninsured Motorist
• You or your passengers are physically hurt by an uninsured (or underinsured) driver • The other driver should have Bodily Injury Liability insurance to cover your injuries. • Uninsured Motorist insurance covers what the other driver should have, but may not. • NOT required by the state of California

Towing and Road Service
• Your car won’t run and needs to be towed • ―Road Service‖ includes things like a tire change or a jump start • NOT required by the state of California

Review
• These are the only two types of insurance required by the state of California:
–Bodily Injury Liability –Property Damage Liability

Review
• This will pay for people you hurt:
–Bodily Injury Liability

Review
• This will pay to repair or replace other people’s property that you damage:
–Property Damage Liability

Review
• These will pay for damage to your car:
–Collision –Comprehensive

Review
• These will pay for damage to you:
–Medical Payments –Uninsured Motorist

7 parts of car insurance
1. 2. 3. 4. 5. 6. 7. Bodily Injury Liability—Required Property Damage Liability—Required Medical Payments Collision Comprehensive Uninsured Motorist Towing and Road Service

How much of your premium pays for the insurance
1. 2. 3. 4. 5. 6. 7. Bodily Injury Liability Property Damage Liability Medical Payments Collision – up to 30% Comprehensive – 12% Uninsured Motorist Towing and Road Service 40 – 50%

How insurance rates are set
personal characteristics
–Age –Sex –Marital status –Personal habits (i.e., smoking) –Type and frequency of vehicle use (i.e., commuting)

How insurance rates are set
geographic location - (often classified by zip code)
–―Rural‖ usually lowers rates –―Urban‖ usually raises rates

How insurance rates are set
driving record
–Accident with death, bodily injury, or property damage in excess of $400 may trigger surcharge on premium for 3 years –Number and kind of moving violations (and total of associated points) –Number of years insured with the company

How insurance rates are set
vehicle characteristics
–Damage, repair, and theft record of type and model of car –Age of car

---end of presentation---


				
DOCUMENT INFO