Partial lesson

13 of 36 slides

Insurance Policy

A system of protection against loss in which a number of individuals agree to pay certain sums for a guarantee

that they will be compensated for a specific loss.Every state has financial responsibility laws…requiring

that you can pay for damages that you cause.

A system of protection against loss in which a number of individuals agree to pay certain sums for a guarantee

that they will be compensated for a specific loss.Every state has financial responsibility laws…requiring

that you can pay for damages that you cause.

What is a definition of insurance?

What is a definition of insurance?

Policy

Property Damage Liability

Bodily Injury Liability

Medical Payments Insurance

Collision Coverage

Comprehensive Coverage

No-Fault Coverage

Uninsured Motorist Coverage

Underinsured Motorist Protection

What are the differenttypes of auto insurance?What are the different

types of auto insurance?

…let’s consider them one at a time …let’s consider them one at a time

Liability insurance

covers the damage

you cause to other

vehicles, people, or

property

Liability insurance

covers the damage

you cause to other

vehicles, people, or

property

Oops, my

fault

There are two typesThere are two types

What is Liability?

What is Property Damage Liability?

Property Damage Liability insurance covers the damage you cause to

other vehicles or property.

Property Damage Liability insurance covers the damage you cause to

other vehicles or property.

Recommended coverage:$100,000 Property damage

each occurrence

Recommended coverage:$100,000 Property damage

each occurrence

If you were to hit a very expensive vehicle(s) or take out an expensivetraffic light – the cost could be very high…required in most states.

Oops, my fault

What is Bodily Injury Liability?

Recommended coverage:$100,000 each person

$300,000 each occurrence

Recommended coverage:$100,000 each person

$300,000 each occurrence

Required in most states.State minimums are usually inadequate

Oops, my fault

Bodily Injury Liability pays claims for injuries or deathyou have caused to others involved in the collision.

Pays immediate medical cost even if there is additional medical insurance.

Medical Payments Insurance covers bodily

injuries and funeral expenses for occupants in an insured vehicle up to

stated amounts, regardless of who was at fault.

What is Medical Payments Insurance?

Important coverage for new and expensive cars…usually dropped after about 7 years of ownership

when the vehicle’s value has decreased.

Collision Insurance pays the cost of repairing or replacing

the owners car when the owner is at fault or when when the owner cannot collect from the person

who is at fault.

What is Collision Insurance?

Important coverage for new and expensive cars…usually dropped after about 7 years of ownership

when the vehicle’s value has decreased.

Comprehensive Insurance pays the cost of repairing or replacing the owners car if damage results from: fire, theft, storms, flood,

wind, vandalism, earthquake and riots.

What is Comprehensive Insurance?

Some states have this to prevent over burdening the courts with litigation.

No Fault Insurance:People involved in collisions

recover their losses from their own insurance company

regardless of who is at fault…but with limitations as specified in the policy.

No fault insurance is handled differently from state to state

What is No Fault Insurance?

It pays for injuries toyou or your passengers

in the event of a hit and run collision or if those

who hit you have no insurance or are

underinsured.

What is it?

Required in many states. Needed by all car owners.

It pays for injuries toyou or your passengers

in the event of a hit and run collision or if those

who hit you have no insurance or are

underinsured.

Covers medical bills, legal and court fees,

loss of wages

“Hey, you get back here!”