Ownership Responsibilities Insurance CostsInsurance Costs Purchase and Financing CostsPurchase and...
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Transcript of Ownership Responsibilities Insurance CostsInsurance Costs Purchase and Financing CostsPurchase and...
Ownership ResponsibilitiesOwnership Responsibilities
• Insurance Costs Insurance Costs
• Purchase and Financing CostsPurchase and Financing Costs
• Maintenance and Operating CostsMaintenance and Operating Costs
• Registration and Inspection CostsRegistration and Inspection Costs
• Fuel CostFuel Cost
T – 10.1
Topic 1 Lesson 1
Costs:
INSURANCE TERMS
• Premium: the cost of insurance for your vehicle
• Deductible: what you are willing to pay before the insurance company will pay
Insuring a CarInsuring a Car
VA Law requires you to VA Law requires you to provide proof of financial provide proof of financial responsibilityresponsibility
T – 10.2
Topic 1 Lesson 1
If you still owe money on If you still owe money on your car, your lender your car, your lender may require collision may require collision insuranceinsurance
Your parents’ policy covers Your parents’ policy covers you while you have a learner’s you while you have a learner’s permitpermit
Required Minimum Liability Coverage in VARequired Minimum Liability Coverage in VA
$25,000 for bodily injury / death one person$25,000 for bodily injury / death one person
Up to $50,000 for bodily injury / death two or Up to $50,000 for bodily injury / death two or
more personsmore persons
$20,000 for property damage$20,000 for property damage
Virginia Auto InsuranceVirginia Auto Insurance
T – 10.4
Topic 1 Lesson 2
Virginia Personal Auto PolicyVirginia Personal Auto Policy
Seven Types of CoverageSeven Types of Coverage
LiabilityLiability
Medical PaymentsMedical Payments
Uninsured/Underinsured MotoristUninsured/Underinsured Motorist
CollisionCollision
Comprehensive Comprehensive
Towing and LaborTowing and Labor
Rental ReimbursementRental Reimbursement
T – 10.8
Topic 1 Lesson 3
Liability CoverageLiability Coverage
Pays:Pays: Other people’s medical Other people’s medical
expenses expenses Other people’s auto repairsOther people’s auto repairs Property damageProperty damage
Covers:Covers: YouYou Your family Your family Others driving with your Others driving with your
permissionpermission
Required?Required? Yes, required by Virginia lawYes, required by Virginia law
T – 10.9
Topic 1 Lesson 4
Medical Payments CoverageMedical Payments Coverage
Pays:Pays:Medical expensesMedical expenses
Funeral expensesFuneral expenses
T – 10.10
Covers:Covers: YouYou
Your family Your family
Your passengersYour passengers
Required?Required? Not required by Virginia lawNot required by Virginia law
Topic 1 Lesson 4
Uninsured/Underinsured Uninsured/Underinsured Motorist (UM/UIM) CoverageMotorist (UM/UIM) Coverage
Pays:Pays: Medical expenses Funeral expenses Car repairs Car rental Replacement of damaged contents
T – 10.11
Topic 1 Lesson 4
Covers:Covers: (if hit by an uninsured/underinsured or hit-and-run motorist)
You Your family Your passengers
Required?Required? Not by Virginia law, but company must offer
Collision CoverageCollision Coverage
T – 10.12
Topic 1 Lesson 4
Pays:Pays: Your car repair Your car replacement
Covers:Covers: Your car Regardless of driver or
who was at fault
Required? Required? Not by Virginia law, but
often required by the finance company that loaned you the money to buy the car
Comprehensive CoverageComprehensive Coverage
Pays:Pays:
Car repair or replacement after: firehailstorm theft or other non-collision eventrental car after theft
Covers:Covers: Actual cash value of your car
Required?Required? Not by Virginia law, but often required by
car finance companies
T – 10.13
Topic 1 Lesson 4
Towing and Labor CoverageTowing and Labor Coverage
Pays:Pays: Towing Towing On site labor charges such as On site labor charges such as
changing a tire changing a tire When your car is disabledWhen your car is disabled
Covers:Covers: Your carYour car
Required?Required? Not required by Virginia lawNot required by Virginia law
T – 10.14
Topic 1 Lesson 4
Rental Reimbursement CoverageRental Reimbursement Coverage
Pays:Pays: A rental car while your car is being repaired
after a crashafter comprehensive losses
Covers:Covers: YouYour family members
Required?Required?
Not required by Virginia law
Car Rental Company
T – 10.15
Topic 1 Lesson 4
Things To Know About Car InsuranceThings To Know About Car Insurance• Read Your Policy!
Don’t rely solely on your insurance agent, make sure you understand your policy’s coverage.
• Read the Consumer Bill of Rights:
The Bill of Rights explains your rights and responsibilities so make sure you know and understand these.
• When you have a problem contact your agent/company or the Bureau of Insurance.
Insurance CostsInsurance Costs
Factors used to determine your premium:Factors used to determine your premium:
T – 10.17
Topic 1 Lesson 5
Type of CarType of Car
Highest for luxury, high-performance, and sports carsHigher for cars that damage easilyHigher for cars that cost more to repair
Collision and comprehensive ratesCollision and comprehensive rates
How you use your carHigher for cars driven a lot of miles and used for school, work or business
Your Age, Marital Status, Driving Record, and Grades
Highest RatesHighest RatesMale drivers under 25Unmarried women under 21
Where you live and drive
Urban counties have more crashes and auto thefts so rates tend to be higher than those in rural areas
Insurance CostsInsurance Costs
T – 10.18
Topic 1 Lesson 5
Factors used to determine your individual premium:Factors used to determine your individual premium:
Your DeductiblesYour Deductibles
Your share of the cost of a collision or comprehensive claim
You can reduce your premium by raising your deductibles
SurchargesSurcharges
Penalties added for accidents and certain traffic violations
DiscountsDiscounts
Some are required by the state, while others are incentives offered by insurance companies
T – 10.19
Education and Car Equipment Education and Car Equipment SavingsSavings
NOTE: SOME insurance companies offer the following discounts
Premium DiscountsPremium DiscountsTopic 1 Lesson 6
Auto Insurance DiscountAuto Insurance Discount SavingsSavings
Defensive driving coursesDefensive driving courses Percent offPercent off Liability, Collision, and Medical Payments
Airbags and other passive Airbags and other passive restraintsrestraints
Percent offPercent off Medical Payments and Bodily Injury
Drug / alcohol educationDrug / alcohol education Percent offPercent off Liability, Collision, Medical Payments, and Bodily Injury
Anti-theft devicesAnti-theft devices May Reduce Comprehensive premium;May Reduce Comprehensive premium; amount varies by device and county
Two or more cars on a policyTwo or more cars on a policy May reduce May reduce Liability, Medical Payments Liability, Medical Payments and Collision Insurance costsand Collision Insurance costs
Some companies may give discounts for:Some companies may give discounts for:• Your age and annual mileage drivenYour age and annual mileage driven• Policy renewal, no claims, good driving Policy renewal, no claims, good driving
record and anti-lock brakesrecord and anti-lock brakes• A parent or family whose young driver is A parent or family whose young driver is
away at school without a caraway at school without a car• Full-time college and high school students Full-time college and high school students
with a "B" or 3.0 grade point averagewith a "B" or 3.0 grade point average• Cars with automatic daytime running lightsCars with automatic daytime running lights• Membership or adult leadership in certain Membership or adult leadership in certain
youth organizationsyouth organizations
T – 10.20
Insurance Premium DiscountsInsurance Premium DiscountsTopic 1 Lesson 6
High Risk DriversHigh Risk Drivers High risk drivers (bad driving record)High risk drivers (bad driving record) Each company has its own rules for deciding whether to insure high risk
drivers(Called “underwriting guidelines”)
Usually much harder to get car insurance Must pay higher premiums
Assigned-risk driversAssigned-risk drivers VA Auto Insurance Plan—requires all insurance companies to
take some high risk drivers High risk drivers are assigned to an insurance company by the state Surcharges are added for at least 3 years
T – 10.21
Topic 1 Lesson 6
Your Driving Record May COST YouYour Driving Record May COST You
T – 10.22
High Risk DriversHigh Risk DriversTopic 1 Lesson 6
Crashes or ViolationsCrashes or ViolationsSurchargesSurcharges
Your premium Your premium MAYMAY increase increase by:by:
One collision (at-fault) in 36 months 15%
Two collisions 35%
Three collisions 60%
Each moving violation (speeding, etc.)(Surcharges will apply for certain traffic violations.)
Varies
Involuntary manslaughter 60%
Driving under the influence 60%
Criminally negligent driving 60%
Losing Your InsuranceLosing Your Insurance
CancellationCancellationFirst 60 days, company can cancel for any reason, including a ticket or a collisionAfter policy is in effect more than 60 days, can cancel but:
- must give 10 days' notice before canceling
- Must refund unearned premium
Note: Cancellation for non-payment is effective immediately.
Non-renewalNon-renewalCompany will not offer a new contract
Request Reasons in WritingRequest Reasons in Writing Why company canceled the policy Why company will not renew the policy
T – 10.26
Topic 1 Lesson 6
CANCELEDCANCELED
CANCELED
Buying Car Insurance
• Decide what coverage and deductibles are needed before shopping
• Choose the highest affordable deductible to lower the premium payment
• Ask several companies and get several different quotes
• Answer questions truthfully!• Look at the company’s financial strength and complaint index.