1. What types of damages could you cause while you are driving?

Transcription

1 Bellwork Never lend your car to anyone to whom you have given birth. Erma Bombeck, Humor Writer 1. What types of damages could you cause while you are driving? 2. Do you know how much auto body work costs? A fire hydrant or lamp post costs? What do you know about the cost of doctors and hospitals? 1

2 5 4 AUTOMOBILE INSURANCE OBJECTIVES Learn about different types of auto insurance coverage. Compute insurance costs. Compute payments on insurance claims. 2

3 Key Terms liable - responsible negligent- at fault automobile insurance - a contract between a driver and an insurance company where the driver agrees to pay a fee (premium) and the company agrees to cover certain accident related costs when the driver makes a claim premium - the amount paid for an insurance policy actuary - a statistician who predicts how many customers will submit claims based on criteria such as age, gender, marital status, driving record, and residence claim - a request for money liability insurance - a type of insurance that covers a person from damages; most states have minimum liability requirements surcharge - extra fee paid to auto insurance companies for dividing an annual premium into monthly, quarterly, or semiannual payments deductible - part of the repair or damages that a driver has to pay before the insurance company pays 3

4 Types of Insurance bodily injury liability (BI) - covers bodily injury if a driver is at fault. property damage liability (PI) - insurance coverage that pays for damage a drive causes to another person's property uninsured/underinsured motorist protection (UMP) personal injury protection (PIP) - an added type of insurance coverage, mandatory in some states, that pays for any physical injuries that the driver or passengers sustain while IN the vehicle, even if there is no traffic accident; sometimes called no-fault insurance no fault insurance - same as PIP comprehensive insurance -a type of insurance that covers the repair or replacement of parts of an insured car damaged by vandalism, fire, flood, wind, earthquakes missiles, falling objects, riots, tree sprays, and other disasters; it also covers it the car is stolen collision insurance - a type of insurance that pays for the repair or replacement of an insured car if it is damaged in a collision with another vehicle or object, or if it overturns, no matter who is at fault. This type of insurance is usually required if there is a loan on the car. car rental insurance - a type of insurance that pays fr part of the cost of a rented car if a car is disabled because of a collision or comprehensive coverage repair emergency road service insurance - a type of insurance coverage that pays for towing or road service with a car is disabled. 4

5 Example 1 Kwan s annual premium is $1,284. If he pays quarterly, there is a $1 per payment surcharge (extra fee). What is the quarterly payment? 5

6 CHECK YOUR UNDERSTANDING Leon s annual premium is x dollars. If he pays his premium semiannually, there is a y dollar surcharge on each semiannual payment. Express the amount of his semiannual payment algebraically. 6

7 Example 2 Stan DeMille has $25,000 worth of property damage liability insurance. He caused an accident that damaged a $2,000 fire hydrant and did $5,600 worth of damage to another car. How much of the damage must Stan pay? 7

8 CHECK YOUR UNDERSTANDING Keith ran his car into a telephone pole that had a bicycle leaning against it which was also damaged. The pole will cost x dollars to fix, the bicycle will cost y dollars to replace, and there was w dollars damage to the car. Express algebraically the amount that can be claimed under Keith s property damage liability insurance. 8

9 EXAMPLE 3 Peter has $1,000 deductible collision insurance. Peter backs his car into his garage and causes $4,300 worth of damage to the car. How much will his insurance company have to pay? 9

10 CHECK YOUR UNDERSTANDING Manuel has an x dollar deductible on his comprehensive insurance. His car is stolen and never recovered. The value of his car is y dollars where y > x. How much must the insurance company pay him for his stolen car? 10

11 Homework: Page 242, #'s