Vehicle Insurance pp. 323-326 9- 4 SECTION
Vehicle Insurance pp. 323-326 9-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill.
Jan 13, 2016
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Vehicle Insurance pp. 323-3269-4SECTIONSECTION
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 2 of 19
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liability insurance (p. 323)
Financial protection against accidents that cause bodily injury and property damage.
comprehensive insurance (p. 323)
Insurance protection from losses due to fire, vandalism, theft, and other causes.
Key Words to KnowKey Words to Know
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 3 of 19
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collision insurance (p.323)
Insurance that pays to repair a vehicle if it’s involved in an accident.
deductible clause (p. 323)
An insurance clause that requires the insured to pay a certain amount before the insurance company pays.
Key Words to KnowKey Words to Know
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 4 of 19
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How do I find the annual base premium?
Liability Premium Comprehensive Premium+ Collision Premium____________________ Annual Base Premium
Formula 1Formula 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 5 of 19
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How do I calculate the annual premium?
Annual Base Premium× Driver-Rating Factor____________________ Annual Premium
Formula 2Formula 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 6 of 19
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Kayla Welch is the principal operator of her vehicle. Her driver-rating factor is 2.20. Her insurance includes 50/100 bodily injury and $50,000 property damage. Her vehicle is in age group A and insurance-rating group 13 (or A, 13). She has $50-deductible comprehensive and $50-deductible collision insurance.
Example 1Example 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 7 of 19
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What is her annual base premium?
What is her annual premium?
(Use Figure 9.3 on page 324 of your textbook to find important information for this problem.)
Example 1 (cont.)Example 1 (cont.)
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 8 of 19
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Find the annual base premium.
Liability + Comprehensive + CollisionPremium Premium Premium
$237.20 + $108.00 + $287.20 = $632.40
Example 1 Answer: Example 1 Answer: Step 1Step 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 9 of 19
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Find the annual premium.
Base Premium × Driver-Ratio Factor
$632.40 × 2.20 = $1,391.28
Example 1 Answer: Example 1 Answer: Step 2Step 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 10 of 19
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Use Figure 9.3 on page 324 of your textbook. Soseki Nagamatus has a driver-rating factor of 3.1. His insurance includes 100/300 bodily injury limits and $100,000 property damage limits. His vehicle is in age group B and insurance-rating group 15 (B, 15). He has $50-deductible comprehensive and $50-deductible collision insurance.
What is his annual premium?
What is annual base premium?
Example 2Example 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 11 of 19
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Find the annual base premium.
Liability + Comprehensive + Collision
$272.40 + $128.40 + $311.20 = $712.00
Example 2 Answer: Example 2 Answer: Step 1Step 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 12 of 19
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Find the annual premium.
Base Premium × Driver-Rating Factor
$712.00 × 3.1 = $2,207.20
Example 2 Answer: Example 2 Answer: Step 2Step 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 13 of 19
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Driver-rating factor: 2.0.Age, rating group: C, 15.Coverage: 300/300 bodily injury, $100,000 property damage, $50-deductible comprehensive, and $50-deductible collision.
What is the annual base premium?
What is the annual premium?
Practice 1Practice 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 9-4, Slide 14 of 19
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Annual base premium: $720.80
Annual premium: $1,441.60
Practice 1 AnswerPractice 1 Answer
325: 1-15325: 1-15
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