Owning A VehicleChapter 16

Part III

Motor Vehicle Insurance

Financial ResponsibilityAnyone who owns or drives a vehicle should

have protection against personal injury or damage

You also need protection against loss for injuries to others or damages to the property of others

Every state has a financial responsibility law which requires vehicle owners to prove they can pay for damages or injury in an accident

As of 2000, more than 40 states had laws requiring people to carry insurance—in remaining states, most buy auto insurance by choice

Types of Motor Vehicle InsuranceCoverage provided falls into 2 categories

Bodily injury coverageProtection for property damage

Bodily Injury CoverageBodily injury liability insurance

Protects insured against for injuries or death caused by negligence

Numbers such as 100/300 are often used$100,000 is maximum paid for injuries/$300,000

maximum paid to all injured parties in one accident

Medical payments insurancePays for medical, and sometimes funeral

expenses resulting from bodily injuries to anyone occupying the policy holders car in an accident

Bodily Injury Coverage Cont…Uninsured motorist insurance

Provides protection when the insured is injured in an auto accident that is caused by a driver who has no insurance

Also protects injuries caused by hit-and-runsUnderinsured motorist insurance

Protects you when another driver has insurance, but not enough to pay for any injuries

Property Damage CoverageProperty damage liability insurance

Applies when you damage the property of others, including a car, house, telephone pole, or a tree

Person bringing the claim must show driver of vehicle was at fault

Collision insuranceCovers damage to your vehicle when it is in an

accident, regardless of who was at faultCost can be reduced by having a deductible

clause

Property Damage Coverage Cont…Comprehensive insurance

Applies to damage to your vehicle from sources other than collision Fire Theft Lightening Flood Hail Windstorm Vandalism

No Fault InsuranceRegardless of who caused the accident, all

drivers involved collect money from their own insurance companies

Coverage varies from state to state

What do you think???Jillian pays 20 percent LESS than her brother, Kendall, for car insurance. They are both 17 years of age. Do you agree or disagree with

this practice? Explain your position.