Today s Agenda Targets l l State what

Today’s Agenda ¡ Targets: l l State what factors affect insurance rates Apply insurance concepts and terminology to traffic accident cases

Insurance Lingo ¡ Indemnity l ¡ Places you back into the same (financial) position you were in 1 second before the loss Deductible l A set amount the insured must pay before the insurance company will pay benefits ¡ Collision & Comprehensive Insurance

Insurance Lingo ¡ Insured l ¡ Claimant l ¡ The person or persons covered by X Insurance Company The other individual involved in the loss, not insured by X Insurance Company Arbitration l Settling a claim through a neutral party

Automobile Insurance ¡ Why do we need it? l l l ¡ Auto crashes leading cause of death Teens account for 20% of all accidents Economic Cost - $150 billion/year It’s required! l Liability insurance required in most states

What affects insurance rates? ¡ What group of individuals pays the highest rates? l UNMARRIED MALE DRIVERS, AGES 16 -25

What affects insurance rates? ¡ ¡ ¡ Marital Status: Singles pay more Grades: Good Grades= Lower Premiums Driving Record l l ¡ Sport cars= Higher rates l ¡ ¡ Many accidents = Higher Premium ASSIGNED RISK POOL- these drivers pay VERY high rates (Bad Risk) Color not a factor Age: Older drivers (over 25) get better rates Residence/Commute- city or suburbs, distance

What affects insurance rates? ¡ Higher deductibles = Lower Premium l You take on more of the risk ¡ Older cars: Can drop Collision and Comprehensive Coverage ¡ Multi-car Discounts Increase amount of coverage = increased rates, BUT NOT PROPORTIONALLY! ¡ l Doubling amount of coverage will not double your premium

MI is ‘No Fault’ Auto Insurance What does that mean to me? ¡ If insured in MI = ¡ l l Unlimited medical & rehabilitation benefits Wage loss benefits $20 per day for replacement services for up to 3 years REGARDLESS who is at fault

Why do I need insurance? ¡ MI law l l l ¡ Misdemeanor $200 to $300 fine And / or 1 year in jail Suspended license for 30 days Sued and held personally liable l Liable for all damages when in an accident

Required Automobile Coverage LIABILITY INSURANCE – 3 TYPES ¡ Personal Injury Protection (PIP) l ¡ Medical costs if hurt in auto accident Property Protection (PPI) l Up to $1 million for damage your car does in MI to other people’s property (buildings, fences, etc) OOPS! SORRY!

Required Coverage Continued ¡ Residual Bodily Injury and Property Damage Liability (BI / PD) l l Defense and damages if liable for auto accident Min. limits 20/40/10 $20, 000 max person hurt or killed ¡ $40, 000 max payout per accident for hurt / killed ¡ $10, 000 max property damage in another state ¡

Available Automobile Coverage ¡ Collision – 3 types l Protects against damage to YOUR vehicle due to a traffic accident ¡ l Not required by states, BUT required by your lender! Insurance will only pay for damages up to current value of your car ¡ TOTAL LOSS

3 Types of Collision 1. Limited: l l 2. If >50% at fault, pays nothing If not at fault, pays except deductible Standard: l Regardless of fault pays except for the deductible ¡ 3. Mini-tort allows you to get $500 from at fault driver Broad Form: l l If >50% at fault, same as Standard If not at fault, insurance pays all

Available Automobile Coverage ¡ Comprehensive Coverage l Protects against loss to your vehicle (physical damage) due to: Theft ¡ Vandalism ¡ Fire ¡ Falling objects ¡ Flood ¡ Collides with an animal ¡

Available Automobile Coverage ¡ Uninsured / Underinsured Motorists: l l ¡ Residual Liability Insurance Increase l ¡ Compensate you for pain and suffering and wage loss if injured in hit and run or uninsured motorist hits you Also covers you as a pedestrian Buy more than basic limit of 20/40/10 “Mini-Tort” coverage l Cover $500, other person, deductible if you cause an accident