My personal finance teacher's powerpoint which wont play with audio on my computer but hopefully will on here >.>

1. Automobile Insurance: The Basics

2. Automobile Insurance: The Basics
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 car
•Damage to other cars involved
•Medical Bills
•Lost wages
•Pain and suffering
•Prosecution
•Legal Fees
•Fines

4. 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.

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

6. Why do I need auto insurance
• It’s the law!
• There are risks you can’t afford to take
• 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 premium
•High risks will be charged a higher premium

9. Automobile Insurance: The Basics
What determines your premium?
Age
Gender
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. Automobile Insurance: The Policy
Five parts to an insurance policy
Declarations: Summarizes the policy.
Coverage's: Listing of what the insurance covers – the more it covers,
the more it will cost.
Exclusions: Instances when your policy won’t provide coverage.
Conditions: The manner in which the contract is valid. Such as in
order for the policy/contract to be maintained the car must be in road
worthy condition or the contract is breached.
Definitions: Each policy defines what your coverage entails. This can
vary policy to policy.

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

14. KEY TERMS
• Bodily Injury Liability: In auto • Medical Payments: Auto
insurance, liability coverage that insurance coverage can help to
pays for physical injury to people provide medical payment for
in other vehicles treatment of bodily injury.
• Collision: The act or process of • Peril: A cause of loss
colliding; a crash or conflict.
• Policyholder: The owner of an
• Comprehensive Coverage: insurance policy
Insurance designed to pay for the
repair or replacement of the policy • Premium: Payment made by the
owner's car in the event of insured to the insurer
damage not resulting from an
accident.

15. KEY TERMS
• Insurance Policy: A contract
written to protect individuals • Risk: A situation in which some
named in the policy against kind of loss is possible
specific future losses
• Deductible: The amount the
• Insured: An individual, usually but insured pays on a claim before the
not always the buyer, covered by insurer pays the remainder
an insurance policy
• Coverage: Coverage against a
• Insurer: The company or agency specific type of loss
that writes an insurance policy
• Replacement Cost: What it would
• Liability: Legal responsibility
cost to replace a piece of property,
.
or rebuild a structure