T-19.1

Driving Through A New Century

Topic 1 Insuring VehicleTopic 1 Insuring VehicleTopic 2 Purchasing VehicleTopic 2 Purchasing Vehicle

INSURANCEINSURANCE

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Driving Through A New Century

Insuring a CarInsuring a Car

• State law requires you to have car State law requires you to have car

insurance.insurance.

• IfIf you still owe money on your car, your you still owe money on your car, your

lender can require insurance. lender can require insurance.

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Driving Through A New Century

PA Auto InsurancePA Auto Insurance

• You must show Proof of Financial You must show Proof of Financial

Responsibility when you:Responsibility when you:

– Are asked for it by a police officerAre asked for it by a police officer

– Have a collisionHave a collision

– Register your car or renew its platesRegister your car or renew its plates

– Obtain or renew a driver licenseObtain or renew a driver license

– Get your car inspectedGet your car inspected

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Driving Through A New Century

PENNSYLVANIA AUTO PENNSYLVANIA AUTO INSURANCEINSURANCE

• Required Minimum CoverageRequired Minimum Coverage

– Bodily InjuryBodily Injury

• $15,000 per person$15,000 per person

• $30,000 per accident$30,000 per accident

– Property Damage- Property Damage- $5000$5000

– Medical PaymentsMedical Payments-$5,000-$5,000

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Driving Through A New Century

Bodily Injury CoverageBodily Injury Coverage

• Pays: Pays: – Other people’s medical expenses Other people’s medical expenses

• Covers:Covers:– 15 per person15 per person– 30 per accident 30 per accident – If medical expenses are more, you pay!If medical expenses are more, you pay!

• Required? Required? – Yes, by State lawYes, by State law

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Driving Through A New Century

Property DamageProperty Damage

• PAYSPAYS– for for ALLALL property damaged that property damaged that

occurredoccurred

• CoversCovers– 5,000 if you were found to be at fault5,000 if you were found to be at fault

• RequiredRequired– Yes, by State LawYes, by State Law

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Driving Through A New Century

Medical Payments CoverageMedical Payments Coverage

• Pays: Pays: – Medical- 5,000Medical- 5,000– Funeral expensesFuneral expenses

• Covers:Covers: – YouYou– Your family Your family – Your passengersYour passengers

• Required? Required? – Yes, required by State lawYes, required by State law

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Driving Through A New Century

State Personal Auto PolicyState Personal Auto Policy

• Eight Types of CoverageEight Types of Coverage

-Personal Injury Protection/Wage Loss -Personal Injury Protection/Wage Loss

– UninsuredUninsured

– Underinsured MotoristUnderinsured Motorist

– CollisionCollision

– Comprehensive Comprehensive

– Towing & LaborTowing & Labor

– Rental ReimbursementRental Reimbursement

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Driving Through A New Century

Personal Injury Protection Personal Injury Protection (PIP)Coverage(PIP)Coverage

• Pays: Pays: – Medical expensesMedical expenses– Funeral expenses- $2,500Funeral expenses- $2,500– Lost wages- $1,000 a month MaxLost wages- $1,000 a month Max– Homemaker/caregiver servicesHomemaker/caregiver services

• Covers: Covers: – YouYou– Your family Your family – Your passengersYour passengers

• Required? Required? – Not by State law, but company must offerNot by State law, but company must offer

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Driving Through A New Century

Uninsured/Underinsured Motorist (UM/UIM) Uninsured/Underinsured Motorist (UM/UIM) CoverageCoverage

• Pays:Pays: $15,000/$30,000$15,000/$30,000– Medical expensesMedical expenses– Funeral expensesFuneral expenses– Car repairsCar repairs– Car rental Car rental – Replacement of damaged contentsReplacement of damaged contents

• Covers:Covers: – YouYou– Your family Your family – Your passengersYour passengers

• Required?Required? – Not by State law, but company must offerNot by State law, but company must offer

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Driving Through A New Century

Collision CoverageCollision Coverage

• Pays: Pays: – Your car repair Your car repair – Your car replacement Your car replacement – Actual Cash ValueActual Cash Value

• Covers: Covers: – Your car Your car – Regardless of driverRegardless of driver– Deductible-$250/$500Deductible-$250/$500

• Required? Required? – Not by State law, but by car loan lendersNot by State law, but by car loan lenders

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Driving Through A New Century

Comprehensive CoverageComprehensive Coverage

• Pays: Pays:

– Car repair or replacement afterCar repair or replacement after • Fire,theft or other non-collision eventFire,theft or other non-collision event

Deductible up to 1,000Deductible up to 1,000

RATES DON’T GO UPRATES DON’T GO UP

• rental car after theftrental car after theft

• Covers: Covers: – Your carYour car

• Required? Required? – Not by State law, but by car loan lendersNot by State law, but by car loan lenders

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Driving Through A New Century

Towing & Labor CoverageTowing & Labor Coverage

• Pays: Pays: – Towing Towing

– Labor charges Labor charges

– When your car is disabledWhen your car is disabled

• Covers: Covers: – Your carYour car

• Required? Required? – Not required by State lawNot required by State law

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Driving Through A New Century

Rental Reimbursement CoverageRental Reimbursement Coverage

• Pays: Pays: – A rental car A rental car

– Your car is undergoing repair Your car is undergoing repair

– For covered damageFor covered damage

• Covers: Covers: – You You

– Your family membersYour family members

• Required? Required? – Not required by State lawNot required by State law

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Driving Through A New Century

Insurance CostsInsurance Costs

• How car rates are determinedHow car rates are determined

• Factors used in establishing ratesFactors used in establishing rates

• DiscountsDiscounts

– MandatoryMandatory

– Non-mandatoryNon-mandatory

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Driving Through A New Century

Insurance CostsInsurance Costs

Factors Used to Determine Your PremiumFactors Used to Determine Your Premium

• Drivers CharacteristicsDrivers Characteristics– Your age and marital statusYour age and marital status

•Highest ratesHighest rates– Male and female drivers under Male and female drivers under

2525– Unisex stateUnisex state

•Driving RecordDriving Record•Years LicensedYears Licensed•Policy HolderPolicy Holder

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Driving Through A New Century

Insurance CostsInsurance Costs

– Make & Model- VIN NUMBERMake & Model- VIN NUMBER– County where you keep your carCounty where you keep your car

• Urban counties have more accidents and auto thefts; Urban counties have more accidents and auto thefts; tending to be higher than those of rural areastending to be higher than those of rural areas

– Your carYour car• AgeAge• Safety featuresSafety features• Collision and comprehensive rates Collision and comprehensive rates

– Highest for luxury, high-performance, and sports cars Highest for luxury, high-performance, and sports cars – Higher for cars that damage easily Higher for cars that damage easily

– Higher for cars that Higher for cars that cost more to repair cost more to repair

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Driving Through A New Century

Insurance CostsInsurance Costs

• Factors used to determine your individual Factors used to determine your individual premiumpremium– Your deductibles Your deductibles

• Your share of the cost of a collision or comprehensive Your share of the cost of a collision or comprehensive claim claim

• Reduce your premium by raising your deductiblesReduce your premium by raising your deductibles

– SurchargesSurcharges• Added for collisions resulting in property damage of Added for collisions resulting in property damage of

$1,000 or more$1,000 or more

– Discounts Discounts • Some required by the state, while others are optional Some required by the state, while others are optional

with companieswith companies• Mutuals are not required to give any discountsMutuals are not required to give any discounts

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Driving Through A New Century

Premium DiscountsPremium Discounts

Auto Insurance Discounts Savings

Defensive driving and driver education courses for young drivers

Airbags and other passive restraints

Good Student

Anti-theft devices

Two or more cars on a policy

10 percent off Liability, Collision Medical Payments, and PIP

15 percent off Medical Payments and PIP (driver’s side) 30 percent off Medical Payments and PIP (both sides)

5 percent off Liability, Collision, Medical Payments, and PIP

Reduces Comprehensive premium; amount varies by device and county

20 percent off Liability, Medical Payments, and PIP 15 percent off Collision

• Education and Car Equipment Saves

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Driving Through A New Century

Premium DiscountsPremium Discounts

• Companies Companies may givemay give optional discountsoptional discounts for: for:

– Your age and annual mileage drivenYour age and annual mileage driven

– Policy renewal, with a good claims and driving recordPolicy renewal, with a good claims and driving record

anti-lock brakesanti-lock brakes

– A parent or family whose young driver is away at A parent or family whose young driver is away at

school without a carschool without a car

– Full-time college and high school students with a "B" Full-time college and high school students with a "B"

or 3.0 averageor 3.0 average

– Cars with automatic daytime running lightsCars with automatic daytime running lights

– Membership or adult leadership in certain youth Membership or adult leadership in certain youth

organizations. organizations.

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Driving Through A New Century

"High Risk" Drivers"High Risk" Drivers

• Each company has its own rulesEach company has its own rules– called "underwriting guidelines" called "underwriting guidelines"

– for deciding whether to insure peoplefor deciding whether to insure people

• Makes it harder to get car insuranceMakes it harder to get car insurance

• Must pay higher premiums Must pay higher premiums

• Insurance for high risk drivers Insurance for high risk drivers

• SurchargesSurcharges

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Driving Through A New Century

"High Risk" Drivers"High Risk" Drivers

• Your Driving Record Will Cost You

One collision (at-fault) in 36 months

Two collisions

Three collisions

Each moving violation (speeding, etc.)

Involuntary manslaughter

Driving under the influence

Criminally negligent driving

No license, or license suspension

15%

35%

60%

0%

60%

60%

60%

35%

* Surcharges for most drivers are percentages of the rates in your county for liability, collision, PIP, and medical payments coverage.

Accident or Violation (Premium Cost will increase by)Surcharge *

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Driving Through A New Century

Buying a CarBuying a Car

• New or Used?New or Used?

• What Do I Need It To Do?What Do I Need It To Do?

• What Safety Features Are Needed?What Safety Features Are Needed?

• How Much Will It Cost?How Much Will It Cost?

• How Economical Is It?How Economical Is It?

• What Options Do I Need?What Options Do I Need?

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Driving Through A New Century

Your Monthly PaymentYour Monthly Payment

• PricePrice FormulaFormula

• What is the Monthly What is the Monthly Payment?Payment?

Vehicle PriceVehicle Price

Purchase Price x Interest Rate x Length of FinancePurchase Price - $12,000Interest Rate - 7 percentLength of Finance - 48 months

Purchase Price + Interest+ Sales Taxes = Total PricePurchase Price + Interest+ Sales Taxes = Total Price

over 16,000.00over 16,000.00