OBJECTIVES TO COMPUTE LIABILITY COLLISION AND COMPREHENSIVE CAR INSURANCE PREMIUMS TO COMPUTE SURCHARGES AND DISCOUNTS FOR CAR INSURANCES Warm Up Calculate 8 39133 445170 29551 ID: 319832
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7-6 AUTOMOBILE INSURANCE
OBJECTIVES:TO COMPUTE LIABILITY, COLLISION, AND COMPREHENSIVE CAR INSURANCE PREMIUMSTO COMPUTE SURCHARGES AND DISCOUNTS FOR CAR INSURANCES
Warm
Up
Calculate:
.8 [ 3.9(133) + 4.45(170) + 2.95(51) ] Slide2
7-6 AUTOMOBILE INSURANCE
OBJECTIVES:TO COMPUTE LIABILITY, COLLISION, AND COMPREHENSIVE CAR INSURANCE PREMIUMSTO COMPUTE SURCHARGES AND DISCOUNTS FOR CAR INSURANCES
Vocabulary
Car Insurance – protection you buy to pay for losses due to accidents or natural disasters
Policyholder – insurance customers
Premium – fee based on the amount, coverage type, and specific characteristics of the policyholder
Coverage – the type of insurance you place on your auto
Liability – coverage that pays for bodily injury and property damage caused by the policyholder
Underinsured Motorist – coverage that pays when another motorist does not carry enough insurance
Uninsured Motorist – coverage that pay when another motorist does not carry insurance
Collision – coverage that pays for damages to the policyholder’s own auto due to a collision
Comprehensive – coverage that pays for damages to the policyholder’s vehicle that weren’t a result of a collision like theft or vandalismSlide3
7-6 AUTOMOBILE INSURANCE
OBJECTIVES:TO COMPUTE LIABILITY, COLLISION, AND COMPREHENSIVE CAR INSURANCE PREMIUMSTO COMPUTE SURCHARGES AND DISCOUNTS FOR CAR INSURANCES
Vocabulary (continued)
Claim – an attempt to collect money from the insurance company based on your insurance policy
Deductible – the amount that the policyholder will pay before the insurance company pays
Base Rate – rate charged without surcharges or discounts
Surcharges – increased rates
Fair Isaac Score – a score based on your credit rating; some insurance companies will use this score to apply discounts or surchargesSlide4
7-6 AUTOMOBILE INSURANCE
OBJECTIVES:TO COMPUTE LIABILITY, COLLISION, AND COMPREHENSIVE CAR INSURANCE PREMIUMSTO COMPUTE SURCHARGES AND DISCOUNTS FOR CAR INSURANCES
Example 1 p 271
Check Table 7.7 for Liability Coverage of 100/300/50 for a retired driver
Liability = $127
Check Table 7.8 for Collision Coverage with a $250 deductible on a full-size car
Collision = $216
Check Table 7.9 for Comprehensive Coverage with a $500 deductible on a full-size car
Comprehensive = $59
Total = 127 + 216 + 59 = $402Slide5
7-6 AUTOMOBILE INSURANCE
OBJECTIVES:TO COMPUTE LIABILITY, COLLISION, AND COMPREHENSIVE CAR INSURANCE PREMIUMSTO COMPUTE SURCHARGES AND DISCOUNTS FOR CAR INSURANCES
Example 2 p 271
Check Table 7.7 for Liability Coverage of 25/50/25 for a pleasure-use driver. Multiply by the surcharge found in Table 7.10 for a restricted male age 18
Liability = 128 * 2.8 = $358.40
Check Table 7.8 for Collision Coverage with a $250 deductible on a subcompact car. Again multiply for the appropriate surcharge for a young driver.
Collision = 192 * 2.9 = $556.80
Check Table 7.9 for Comprehensive Coverage with a $250 deductible on a subcompact car. Again multiply for the appropriate surcharge for a young driver.
Comprehensive = 46 * 1.6 = $73.60
Total * Good Student Discount = (358.40 + 556.80 +
73.60) (.8)
= $791.04Slide6
7-6 AUTOMOBILE INSURANCE
OBJECTIVES:TO COMPUTE LIABILITY, COLLISION, AND COMPREHENSIVE CAR INSURANCE PREMIUMSTO COMPUTE SURCHARGES AND DISCOUNTS FOR CAR INSURANCES
Example 3 p 271
Check Table 7.7 for Liability Coverage of 100/300/50 for a driver who drives 10+ miles to work.
Liability = $145
Check Table 7.8 for Collision Coverage with a $500 deductible on a mid-size car.
Collision = $165
Check Table 7.9 for Comprehensive Coverage with a $250 deductible on a mid-size car.
Comprehensive = $56
Total with Accident Surcharge = 145 + 165 + 56 + (.29)(145 + 165) = $455.90
Calculate the surcharge for the accident (3 points)
15% + 2(7%) = 29%Slide7
7-6 AUTOMOBILE INSURANCE
OBJECTIVES:TO COMPUTE LIABILITY, COLLISION, AND COMPREHENSIVE CAR INSURANCE PREMIUMSTO COMPUTE SURCHARGES AND DISCOUNTS FOR CAR INSURANCES
Homework
p 272-273
#1-4, 9-11, 15-17