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.