Introduction to Auto Insurance

Front

What does auto insurance protect you financially from?

Back

Damage to someone else's car or property, Injuries resulting from an auto accident, Damage to your car.

Answer explanation

3 MAIN TYPES OF COVERAGE

• 1. LIABILITY

• 2. COLLISION

• 3. COMPREHENSIVE

Front

What is an auto insurance policy?

Back

A legal agreement between the policyholder and the insurance company.

Answer explanation

Depending on the policy you choose, car insurance can provide financial protection in the event your car is damaged or stolen, you’re injured in an accident, or you’re at fault for an accident that causes bodily injury or property damage to third parties.

Front

What does "comprehensive coverage" in auto insurance pay for?

Back

Physical damage to your car caused by situations other than a collision.

Answer explanation

Comprehensive insurance helps pay for damages to your vehicle caused by factors other than an accidental collision, such as fire, vandalism, weather (hail, flooding, wind, lightning, etc.), theft, impact with an animal, etc.

It is COMPREHENSIVE.

Front

Why do drivers under age 25 pay more for auto insurance?

Back

Because they are more likely to cause accidents

Answer explanation

Front

Why are deductibles important in auto insurance?

Back

To lower the premium

Answer explanation

Is it better to have a $500 or $1,000 deductible?

It's better to have a $500 deductible if you're a driver that has been in more than one accident or has gotten a DUI in the last three years.

If you're more likely to get into an accident, you won't want to pay out a higher deductible.

Front

Insurance rates for this group are often significantly higher than others. Options: Students or new drivers, Experienced drivers.

Back

Students or new drivers.

Answer explanation

Inexperience, distracted driving (cell phone, music, friends), and a tendency towards risky behaviors all contribute to the increased risk associated with insuring young drivers.

Front

A ________ is the amount of money that the insured person must pay before their insurance policy starts paying for covered expenses. With a $500 ____, for example, you pay the first $500 and insurance covers the rest. $1200 bill - $500 you pay = $700 insurance company pays

Back

Deductible

Front

This is an auto insurance policy discount available to young drivers who earn good grades in school.

Back

Good Student Discount

Answer explanation

Teen drivers aged 15 to 19 have the highest rate of accidents of any age group, which is why insurers tend to charge more to cover them.

Front

Some states allow insurance companies to use ________ to rate drivers because insurers have proven a correlation between these scores and losses.

Back

credit score

Front

Your car insurance costs will spike anywhere from 70-80% after this...

Back

DUI - Driving While Under the Influence

Answer explanation

According to Forbes, the national average auto insurance rate increase for drivers with a DUI is 70%. That king-size rate increase translates to an extra $1,470 a year for car insurance.

By comparison, the average rate increase after a speeding ticket is only 22% and the rate increase after an accident is 42%.