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Auto insurance narrated show

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

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Auto insurance narrated show

  1. 1. Automobile Insurance: The Basics
  2. 2. Automobile Insurance: The Basics What is the likelihood you will be in an automobile accident?There are more than 12 million motor vehicle accidentsannuallyThe typical driver will have a near automobile accident one ortwo times per monthThe typical driver will be in a collision of some type on averageof every 6 yearsCrashes are the leading cause of death for ages 3-33
  3. 3. Automobile Insurance: The BasicsEven a minor accident can result in thousands ofdollars in damages•Damage to your car•Damage to other cars involved•Medical Bills•Lost wages•Pain and suffering•Prosecution•Legal Fees•Fines
  4. 4. Automobile Insurance: The Basics What is Automobile Insurance?An auto insurance policy is a contract between youand an insurance company.You pay a premium, and in exchange, the insurancecompany promises to pay for specific car-relatedfinancial losses during the term of the policy.
  5. 5. Automobile Insurance: The BasicsIf you are in an accident how do you pay for it?Bank Account?Parents?Rich Uncle?Best Friend?Insurance?
  6. 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. 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 aninsurance contract is completed
  8. 8. Automobile Insurance: The Basics What is the insurance company looking for?Some vehicles, and some drivers, carry more riskthan others•Low risks will be charged a lower premium•High risks will be charged a higher premium
  9. 9. Automobile Insurance: The BasicsWhat determines your premium? Age Gender Vehicle Type Driving Record Geographic Location
  10. 10. What is a Deductible?This is the amount per accident that you pay out of pocket before insurance starts to payCommon deductible amounts are usually $250, $500, and $1000The higher the deductible amount you pay the lower your premiums are
  11. 11. Automobile Insurance: The PolicyA common mistake when shopping forautomobile insurance is looking only at theprice between two policiesPolicies differ from policy to policy andcompany to company
  12. 12. Automobile Insurance: The Policy Five parts to an insurance policyDeclarations: Summarizes the policy.Coverages: 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 inorder for the policy/contract to be maintained the car must be in roadworthy condition or the contract is breached.Definitions: Each policy defines what your coverage entails. This canvary policy to policy.
  13. 13. Automobile Insurance: The BasicsWhat can you do to reduce risk and lower premiums?Use your seatbelt Be PatientObserve Speed Limits Don’t Drink and DriveKnow your own limits Get good gradesConcentrate on driving
  14. 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 owners car in the event of insured to the insurer damage not resulting from an accident.
  15. 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