Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 1 INSURANCE UNIT 11

Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association

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INSURANCE

UNIT 11


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Insurance

Any form of insurance is that you pay a relatively small amount so no one gets caught with a large financial loss.

i.e. $500/year homeowners policy will pay for a $100,000.00 house or a $500,000.00 lawsuit.


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Types of insurance other than automobile insurance

All forms of insurance are the same concept. You protect against a large financial loss. Homeowners, life, health, renters, disability,

dental are just some of the forms of insurance other than car insurance.


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“Financial responsibility"

In NC, as most other states, an owner/driver is required to prove financial responsibility in order to legally operate a motor vehicle.

A driver must be responsible for any damage he/she does to someone else or their property.


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Ways for someone to prove financial responsibility in North Carolina

The two ways to prove financial responsibility are – to post a cash bond, in effect self insuring you or

your company– buy liability insurance.


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Personal injury liability

Personal injury liability (PIL) insurance protects the owner/driver against having to pay for injuries they have caused to others.

PIL will pay up to the limit, amount purchased, of the policy.


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Personal injury liability

The minimum amount allowed by law in NC is $60,000.00 per accident, all persons injured, and $30,000.00 per person, anyone person.

This is not enough coverage to adequately protect you if you seriously hurt someone. 100/300 or 300/300 might be a better choice even if it costs a little more in premiums.


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Property damage liability

Property Damage Liability (PDL) insurance pays for damage you do to another person's property (car, house, yard, mailbox, etc.).

Your company will pay, up to the limit of the policy, to fix other's property.


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Property damage liability

NC requires a minimum of $25,000.00 PDL. For about $4 more per year, you can buy $50,000.00 coverage. (May 2000)

DMV requires proof of both types of liability insurance to get a license plate or a driver's license.

A DL 123 form is filled out by an insurance agent as proof of liability coverage.


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Collision coverage insurance

Collision insurance protects your car when you are at fault in a collision.

Your company will pay up to the "book" value of your car in the event you damage it, minus the deductible.

Deductibles are the portion you pay first before the insurance company pays.


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Collision coverage insurance

Deductibles are usually $250.00 - $1000.00, with the higher the deductible the lower the premium.

Any collision claim will raise your future premiums.

Collision is required if you lease or borrow money against your vehicle.


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Comprehensive insurance

Comprehensive insurance pays to repair your vehicle from "acts of God", theft, vandalism, damage that you are not responsible for, or even a deer damaging your car.

Again your company will pay up to the book value.


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Comprehensive insurance

Comprehensive claims do not increase your rates because they are not your fault.

Comprehensive is also required for a loan or lease.


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Medical payments insurance

Medical payments insurance pays for you or your passengers medical bills, regardless of fault, up to the limit of the policy.

$5,000.00 is currently the maximum amount available in NC.


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Medical payments insurance

This will pay for minor injuries, ambulance, ER visits, and deductibles on major medical policies.

It is not intended to cover all medical bills. You are not required to have medical payments coverage.


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Uninsured motorist insurance

Uninsured motorist coverage protects the owner/driver against another driver, at fault, not having any insurance.

Your company will pay your medical and vehicle repair bills, up to the limit of the policy, if the other driver does not.

You are not required to have uninsured motorist coverage.


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Under insured motorist insurance

Under insured motorist coverage protects the owner/driver in the event the other driver (at fault) has insurance but not enough to cover the judgment.

Your company pays what their company does not, up to the limit of your policy.

You are not required to have underinsured motorist coverage.


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Rental reimbursement coverage

Rental reimbursement coverage will pay for a rental car when your car is being repaired under collision coverage. (Not required)


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No-fault insurance

NC does not have "no-fault" insurance but if you run into someone from a state with this type of coverage, you will be covered as you would any other type of coverage.

Their company will pay if their policy holder is at fault.


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Necessary coverage for a rental car

If you rent a car, the rental company requires you to insure their car.

If you have comprehensive and collision on your vehicle, it will cover the rental car at no extra charge.


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The difference between driver license points and insurance points in North Carolina

Driver license points are used to revoke a person's license.

Insurance points are used to determine rates. See the handout.


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How much insurance points will affect rates

Insurance points increase premiums – 1 point 15% – 2 points 40% – 3 points 65% – 4 points 90% – 5 points 120% – 6 points 150% – 7 points 180% – 8 points 220% – 9 points 260% – 10 points 300% – 11 points 350% – 12 points 400%


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Factors in North Carolina that affect insurance rates

There are many factors that can and do affect insurance rates. – A. Driving record (see above) – B. What the vehicle is used for – C. Where you live and drive – D. Driving experience - An inexperienced driver

pays an additional 150% for the first two years and 100% for the third year. After three years experience the rates return to normal.

– E. If you have more than one vehicle on a policy, you get a 20% car discount for each vehicle.


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Factors in North Carolina that affect insurance rates

There are many factors that can and do affect insurance rates.

– F. The amount of coverage (30/60/25, 100/300/50) will affect your premiums.

– G. Type of vehicle insured. Expensive vehicles cost more to insure. Vehicles with high accident rates cost more. Vehicles that are stolen more, cost more. Check with your agent before leasing or buying that new vehicle.

– H. Living in NC costs you less too. Only Idaho, Nebraska, North and South Dakota and Iowa have cheaper car insurance.

– I. Being a high risk driver can put you in the Reinsurance Facility.


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Factors that will not affect insurance rates in North Carolina

Insurance rates in NC are not based on age, gender, marital status, grades, driver education, or color of the vehicle.

Documents

Unit 11 Insurance North Carolina Driver and Traffic Safety Education Association 1 INSURANCE UNIT 11