9.4 Vehicle Insurance

Warm Up 11/141)8900+ 550 + 250 + 100 =

2)14500 – 200 + 150 =

3)Sport truck with 42,306 miles driven on it. Average retail value is $19,600. Add $275 for 7/8 passenger seating. Add $375 for rear air conditioning. Deduct $225 for mileage. What is the average retail price?

9800

14150

$ 20,025

The focus of this section is to use tables to compute the annual premium for vehicle insurance. In California, it is against the law to dive a car without auto insurance. This is an additional cost that needs to be considered when purchasing a vehicle.

COMPREHENSIVE INSURANCE: protects you from losses due

to fire, vandalism, theft, and so

on. COLLISION INSURANCE:

pays to repair YOUR car if its in an accident.

LIABILITY INSURANCE: Insurance that you

need to have in case you are involved in an

accident.

•Each kind of insurance may have a deductible clause. This is the amount that you are required to pay for any repair bill. For example, if your deductible is $50 and your repair bill is $400, you pay $50 and the insurance company pays $350.

Deductible Clause

How much is your insurance going to cost you ?

Your Base premium involves three factors:• The amount of insurance you want• How old your vehicle is• The insurance-rating group (which

depends on the size and value of your car).Your annual premium is based on:

• Your base premium• Driver-rating factors

What are some factors that might affect your Driver Rating?

• Age• Marital status• Miles you drive weekly• Driving record• Gender• GPA in school • Zip Code

Car Insurance

9.4 Vehicle Insurance

9.4 Vehicle Insurance

Liability Premium = $ 213.20Comprehensive Premium = $81.60

Use the Insurance Rate table on your desk.Julie Spiros, age 21 and unmarried, drives her vehicle to and from work. Her driver-rating factor is 1.85. Her vehicle is classified A-11. She has $25,000 property damage, 50/100 bodily injury, $50-deductible comprehensive, and $50-deductible collision coverages. What is her base premium? What is her annual premium?Collision Premium = $246.00

Base Premium = $540.80

9.4 Vehicle Insurance

Liability Premium = $ 213.20Comprehensive Premium = $81.60Collision Premium = $246.00Base Premium = $540.80

Annual Premium = Base Premium x Drive Record

FactorAnnual Premium = $540.80 x 1.85 = $ 1000.48

9.4 Vehicle Insurance

Complete the following on your own.

• Theo Norton is 18 years of age• His driver-rating factor is 2.30 • The family car is classified C-15• The insurance the Norton’s have is $50,000 property damage• 100/300 bodily injury• $50-deductible comprehensive• $50-deductible collisionWhat is his annual premium?

9.4 Vehicle Insurance

Liability Premium = $ 264.00Comprehensive Premium = $122.80Collision Premium = $296.80Base Premium = $683.60

Annual Premium = Base Premium x Drive Record

FactorAnnual Premium = $683.60 x 2.30= $ 1572.28

9.4 Vehicle Insurance

Classwork assignment

Page 3263 - 10