PF CH 15

Personal Personal FinanceFinance

Chapter 15Chapter 15

Liability coverage protects you whether you are driving your own car

or someone else’s car

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Bodily injury liability coverage pays BOTH medical and legal expenses.


Collision coverage is usually the least expensive portion of an auto insurance

policy.


Comprehensive insurance covers losses if your vehicle is stolen.


A homeowner’s policy includes liability protection whether you are at

home or elsewhere.


Renters do not need property insurance b/c they don’t own the building where

they live.


If you live in a high-risk area, you cannot get home insurance.



Auto InsuranceTypes of Coverage

• Liability–Bodily injury

–Property damage



• Collision–Deductible

–Totaled



• Comprehensive–Parked

–Natural disasters

–Vandalism

–Stolen

–Animals



• Other–Rental –Towing–Medical payments–Personal injury protection (PIP)–Uninsured / underinsured motorists–Assigned-risk policies


Auto InsuranceSummary


Auto InsuranceBuying Auto Insurance

• Exclusions

• Premium

• How much of each kind?–Required kinds vary by state

–Most require BI / PD ($ amounts vary)


Which kind of auto insurance covers the damage to your automobile should you be in an accident while driving your car down the street?

A. Bodily injury

B. Property damage

C. Comprehensive

D. Collision

E. PIP


Which kind of auto insurance covers the damage to your automobile should you be in an accident while driving your car down the street?

A. Bodily injury

B. Property damage

C. Comprehensive

D. Collision

E. PIP


What do you think?Discussion

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• What is the minimum auto insurance your state requires to operate a vehicle?• Why should you carry more than the

minimum? Will a finance company require more?• When should you drop collision and

comprehensive coverage?



• Factors–Driver• Age

• Marital status

• Gender

• Driving record



• Factors–Where driver lives• Urban• Suburban• Rural



• Factors–How much driving• Commuting to work

• Pleasure driving



• Factors– Type of vehicle

• Sports vs. standard

• Safety features

• Accident rates

• Theft rates

• Repair costs



• Controlling your cost– Good student discount

– Clean driving record

– Safety feature discount

– Multiple-car discount

– Higher deductibles

– Consider dropping collision /comprehensive


Auto InsuranceHandling an Accident

• Accident kit


Accident Kit

• Your vehicle registration card (issued by the state)• A card verifying that you have insurance• A pen and paper for taking notes• A disposable or digital camera (or cell phone) for

taking pictures of the accident• Contact information for a person who should be

notified in case of emergency• Medical information for emergency responders• Phone numbers of local police / fire / ambulance if no

911 service


Auto InsuranceHandling an Accident

• Be prepared. Try to think clearly.


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Which of the following is not suggested for your accident kit?

A. Car registration

B. Insurance card

C. Disposable camera

D. Medical information card

E. All of these should be in your accident kit.


Which of the following is not suggested for your accident kit?

A. Car registration

B. Insurance card

C. Disposable camera

D. Medical information card

E. All of these should be in your accident kit.




• What other tips do you have for dealing with an accident?

• What other tips do you have for controlling the cost of auto insurance?

• Why do teenagers (especially males) pay more for auto insurance? Is that fair?


Home InsuranceTypes of Coverage

• Physical structure

• Personal property– Actual cash value (depreciation)

– Replacement cost value

• Liability

• Living expenses

TV new 1990 = $250Depreciation = -$200Insurance check = $50


Home InsuranceTypes of Coverage

• Homeowner’s

• Renter’s

• Condominium

• Manufactured home


Home InsuranceHow Much Coverage?

• Rebuilding home

• Personal possessions

• Living expenses while rebuilding

• Liability to others


Home InsuranceControlling Costs

• Install home security devices.

• Take out multiplepolicies with thesame company.

• Use fire-resistantmaterials.


Home InsuranceInventory

• Make a list.• Videotape / photograph

everything.• Keep a copy

in a secure place.–Safety deposit box–Work / relatives / friends


Home InsuranceCan’t Get Insurance

• High risk–Flood

–High crime

–Older home – not up to code

• FAIR Plan (state)


What do we call the type of coverage that replaces a lost TV with the same new TV regardless of cost?

A. Actual cash value

B. New cash value

C. Replacement cost value

D. PIP

E. Liability cost value


What do we call the type of coverage that replaces a lost TV with the same new TV regardless of cost?

A. Actual cash value

B. New cash value

C. Replacement cost value

D. PIP

E. Liability cost value




• Should the federal government pay for flood insurance in coastal areas that are often hit by hurricanes?• Do you keep records of what you own?

Why or why not? If you do, where do you keep them? • Why do renters need insurance?


PF CH 15

Education