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Vehicle Insurance

SECTION. 9-4. pp. 323-326. Vehicle Insurance. Use tables to compute: annual premium for vehicle insurance. Section Objective. Key Words to Know. liability insurance (p. 323) Financial protection against accidents that cause bodily injury and property damage.

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Vehicle Insurance

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  1. SECTION 9-4 pp. 323-326 Vehicle Insurance

  2. Use tables to compute: • annual premium for vehicle insurance Section Objective

  3. Key Words to Know liability insurance (p. 323) Financial protection against accidents that cause bodily injury and property damage. comprehensive insurance (p. 323) Insurance protection from losses due to fire, vandalism, theft, and other causes.

  4. Key Words to Know collision insurance (p.323) Insurance that pays to repair a vehicle if it’s involved in an accident. deductible clause (p. 323) An insurance clause that requires the insured to pay a certain amount before the insurance company pays.

  5. Formula 1 How do I find the annual base premium? Liability Premium Comprehensive Premium + Collision Premium ____________________ Annual Base Premium

  6. Formula 2 How do I calculate the annual premium? Annual Base Premium × Driver-Rating Factor ____________________ Annual Premium

  7. A Hard One to Pick p. 324 Why might Gomez never have had collision insurance on her old truck?

  8. Example 1 Della Welch is the principal operator of her vehicle. Her driver-rating factor is 2.20. Her insurance includes 50/100 bodily injury and $50,000 property damage. Her vehicle is in age group A and insurance-rating group 13 (or A, 13). She has $50-deductible comprehensive and $50-deductible collision insurance.

  9. Example 1 (cont.) What is her annual base premium? What is her annual premium? (Use Figure 9.3 on page 324 of your textbook to find important information for this problem.)

  10. Example 1 Answer: Step 1 Find the annual base premium. Liability + Comprehensive + Collision Premium Premium Premium $237.20 + $108.00 + $287.20 = $632.40

  11. Example 1 Answer: Step 2 Find the annual premium. Base Premium × Driver-Ratio Factor $632.40 × 2.20 = $1,391.28

  12. Example 2 Use Figure 9.3 on page 324 of your textbook. Soseki Nagamatus has a driver-rating factor of 3.1. His insurance includes 100/300 bodily injury limits and $100,000 property damage limits. His vehicle is in age group B and insurance-rating group 15 (B, 15). He has $50-deductible comprehensive and $50-deductible collision insurance. What is his annual premium? What is annual base premium?

  13. Example 2 Answer: Step 1 Find the annual base premium. Liability + Comprehensive + Collision $272.40 + $128.40 + $311.20 = $712.00

  14. Example 2 Answer: Step 2 Find the annual premium. Base Premium × Driver-Rating Factor $712.00 × 3.1 = $2,207.20

  15. Practice 1 Driver-rating factor: 2.0. Age, rating group: C, 15. Coverage: 300/300 bodily injury, $100,000 property damage, $50-deductible comprehensive, and $50-deductible collision. What is the annual base premium? What is the annual premium?

  16. Practice 1 Answer Annual base premium: $720.80 Annual premium: $1,441.60

  17. Practice 2 Jason Edwards drives his car to and from work and for pleasure. His driver-rating factor is 2.50. He has $50-deductible comprehensive, $50-deductible collision, 50/100 bodily injury, and $50,000 property damage insurance. His vehicle is classified as D, 14. What is his annual base premium? What is his annual premium?

  18. Practice 2 Answer Annual base premium: $607.60 Annual premium: $1,519

  19. END OF SECTION 9-4 Vehicle Insurance

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