Ch 10 Property & Motor Vehicle Insurance
Monday, April 13, 2026 1:22 PM
Insurance & Risk Management: An intro
- What is insurance
○ Insurance is a protection against possible financial loss, its there to give you peace
of mind when life happens, you will have money available to meet any needs for:
§ Accidents, medical expenses, to protect you home & belongings, to cover
personal damage to properties caused by a driving accident
○ Life Insurance
§ Replaces income that could be lost if the policy holder dies
○ Car Insurance
§ Helps cover both property & personal damage done caused by the
policyholders vehicle (the person who caused the accident)
○ Home Insurance
§ Secures damages done to a place of residence & its associated financial risks
- Insurance is all based on the principal of pooling risks
○ This is when policy holders pay thousands as a group
- An insurance company
○ AKA the “Insurer”, is a risk sharing company that agrees to take the financial
responsibility of losses that may happen from a risk
- A policy
○ When the insurer joins risk sharing group, they agree to assume the risk at a fee
- The premium
○ They agreed upon fee they have to pay
- Insured
○ The person who is covered by an insurance policy
Types of Risks
- Risk
○ The uncertainty and/or possibility of something happening
- Peril
○ The cause/reason of a possible loss
- Hazard
○ A factor that can increase the likelihood of something happening from peril
- Personal Risk
○ What can happen during the loss of income or a life due to unforeseen events
§ I.E. a death, disability, old age and/or unemployment
- Property Risks
○ Uncertainties of in/direct losses to personal and/or real property from a fire,
windstorm, accident, theft and/or other type of hazard
- Liability Risks
○ Possible losses from injury or harm done to others, i.e. car accident, work place
misconduct and/or injury on someone else’s property
- Pure Risk
○ Aka insurance risk, is the chance that a loss should occur only under specified
circumstances
- A Speculative Risk
○ Risks that carry the chance of either loss or gain
§ I.E. starting a small business
Risk Management Methods
- Risk Management
○ A strategy to protect assets & people from financial loss caused by destructive
events
- Types of Risk management
1. Risk Avoidance
a. You can avoid a car accident by being the passenger, risk avoidance just requires
practical choices
2. Risk Reduction
a. You can avoid risks by being aware & taking precautions as needed
3. Risk Assumption
a. Taking responsibility for the loss or injury that may result from a risk
- Self Assurance
§ The process of establishing monetary value to cover the costs of a loss
4. Risk Shifting
a. Transferring it to an insurance company and/or another type of financial
organization
- A deductible
§ A set amount a policy holder must pay per loss on an insurance policy
Planning an Insurance program
- This type of program can be changed for the individuals needs
-
Your Personal Insurance Program
1. Set Insurance goals
a. Your goal is to minimize personal, property & liability risks
i. Being prepared in the event of a death, having insurance for a car vs paying
out of pocket, disability, loss of a job etc
2. Develop a plan to reach your goals
a. Be aware of risks you might run into & what you can handle w/o a big loss
b. What resources will help you reach your goals?
i. Public programs, personal assets, family/church support, reliability of various
insurers and/or private risk sharing programs
3. Put your plan into action
a. Budget as you go to attain your goal, purchase additional coverage if needed
b. The best plan allows for flexibility, financially, in contracts allowing for changes &
knowing what will work best at your price range
i.e. think of a car, for your first car it might be simple w/ basic insurance but
the financial loss will be easier to manage vs a new car & a high insurance
policy, be sure its something you can afford
4. Review your results
a. Evaluate your plan periodically, ask your self if this works? Be aware of any change
you might need to make to protect your assets
b. What major life changes need to be looked at? I.e. A couple having a baby
c. The needs of a single person vs a family vs a couple are all very different
i. In each case you will have to ask yourself if you have provided yourself w/
enough resources to care for basic needs & responsibility for your own well
being & that of others
Property & Liability Insurance
- The main types of risks related to homes & cars are:
○ Property damages & loss
§ Physical damages
□ Damage caused by fire, wind, water and/or smoke that are temporary
§ Loss of Use
□ This is when an item of value has been stolen, vandalized or arson (lost to
a fire beyond repair)
○ Liability protection
§ Liability
□ A legal responsibility for the financial costs of another persons
losses/injuries
§ Negligence
□ A failure to responsible action in a situation
§ Vicarious Liability
□ When someone is responsible for the actions of another person
Home & Property Insurance
- Homeowners Insurance
○ Coverage to protect your place of residence & its associated financial risks such as
damage to the property or the injury of others
- Homeowners Insurance Coverages
○ Houses & other structures
§ A dwelling or other attached structures are covered under insurance &
protected from any damages
○ Additional Living Expenses
§ Pays for the cost of living temporarily in a separate location while your home
is being repaired
§ Some policies are limited time wise and/or add an additional 10-20% cover
charge, while others may cover costs up to a year
○ Personal Property
§ Household belongings like clothes, furniture & appliances can be insured up to
75%
§ Other common types of property w/ a coverage limit include jewelry valuing
$1,000, firearms valuing $2,000 & silverware valuing $2,500
○ Personal Property Floater
§ Covers damages/losses of a specific high value item
§ Requires a detailed description of the item & appraisal history to verify
current value
○ Household Inventory
§ A documented list of personal belongings, purchase dates & cost information
which can all be retrieved from either an insurance agent or online
□ Items of special value should have receipts, serial numbers, model names
& written appraisals of value
Personal Liabilities & Related Coverages
- The Risks of financial losses
○ A neighbors/guest being injured on your property leading to disability for life
○ A spark starting a fire on your property & damages your neighbors roof
○ Family accidentally damaging property value while visiting someone else’s home
- In each situation you are held responsible for the costs in legal action and/or claims
- An Umbrella Policy
○ AKA Personal Catastrophe Policy, replaces your basic needs under a liability
coverage
○ This also protect you in the event of slander (someone trying to discredit your
name), defamation of character (spreading rumors about you) & invasion of
property
§ Liability policies are sold for $1 million & useful to those of substantial net
worth
□ I.E. a business owner and/or public figure
- Medical Payments Coverage (The Homeowner)
○ Pays the costs of accidents on your property & minor injuries caused by family or
pets
- Supplemental Coverage
○ An insurance that pays for minor inconveniences, this protection is limited to
$500-$1,000
- Specialized Coverages
○ Homeowners insurance doesn’t usually cover natural disasters, The National Food
Insurance Program offers this service, an agent from FEMA can provide additional
info
§ FEMA (Federal Emergency Management Agency)
- Endorsement
○ An additional coverage to the homeowners policy that can be added to specialized
coverages
Beware: When Home insurance coverages collide
- Do you need the flood insurance?
○ Be sure that your property is covered by any additional insurances being sold or
you might need a separate insurance
- The Risk
○ Is your home located in a flood zone? Look for a map of ask you city hall what
precautions you can take
○ Keep up to date w/ flood risks in your area
- Flood insurance
§ If your insurance doesn’t have flood coverage call 1(800)225-3566 or visit CA
Flood Insurance for more info
- What is costs
○ The average policy starts at $700/yr, can vary on coverage based on location risks
& your deductible
- What is covered?
○ The policy can cover your home up to $250,000, a separate policy will be needed
for lost belongings that can cover up to $100,000
- There’s a wait
○ Most policies have a 30 day waiting period to access benefits - don’t wait until the
last minute
- Resources
○ Use FEMA’s Historical Flood Risk & Cost data evaluate the flood risks in your area
FEMA - Flood Maps
Renters Insurance
- Only 4 out of 10 people have renters insurance
○ Renters insurance covers
§ Financial losses/damage against personal property
○ Tenants who pay rent are not covered by renters insurance & can be charged for:
§ Faulty wiring
§ Damages done to the building near their unit
○ Personal belongings are usually covered in student housing under their parents
§ Unless you live off campus - you should considered adding a separate policy
○ Renters insurance is usually affordable & has the same protections as homeowners
insurance
Home Insurance Policy Forms
- Until the mid 1950’s all types of insurances for the home were all separate policies and
were later sold as a package
○ Be aware that some of these assurances don’t always apply to a mobile home
Home Insurance Cost Factors
- How much coverage is needed?
○ Your insurance protection should be based on the amount needed to
rebuild/repair your home
- Coinsurance Clause
○ The homeowner must pay for part of the losses if the property was not insured for
that specified amount of replacement value
- Insurance companies base claim settlements on two methods to finance a home
○ Actual Cash Value (ACV)
§ A claim settlement method that insures payment based on the cost of an item
and/or replacement
○ Replacement Value
§ A payment given to you based on the price of the original item replaced
and/or if the items can depreciate less than the original
- Factors that affect home insurance costs
○ Location
§ What is the usual weather like in this area?
○ Type of Structure
§ Construction materials used to build the home influence what type of
coverage is needed
○ Coverage amount & policy type
§ The policy you pick w/ its limits affect the minimum that you pay
Reducing Home Insurance Costs
- Home Insurance Discounts
○ Most companies offer discounts towards your premium if:
§ You install a smoke detector
§ Add a fire extinguisher
§ Have a dead-bolt lock on the doors
§ Add an alarm system to the home
- Company Differences
○ You can save 30% on homeowners insurance by comparison shopping before
deciding who to use as your insurer
§ Consider services & coverages offered
§ Not all companies will cover claims the same way
§ Use Consumer Reports website to comparison shop
Automobile Insurance Coverages
- On average cars cost $250 billion in accidents, lost wages & medical costs
- The National Traffic Safety Administration states the following as factors:
○ Alcohol, texting & prohibited cell use are half of these costing $30 billion
- A Financial Responsibility Law
○ A state legislation requiring drivers to prove their ability to cover costs of damages
incurred and/or injuries from the accident
- Motor Vehicle Bodily Injury Coverages
○ Bodily Injury Liability
§ Covers financial risks lost to legal & medical expenses, lost wages and/or other
expenses that were lost from a car accident
§ Uninsured and/or under insured motorist protections
○ Medical Payments Coverage
§ Cover the costs of healthcare for those who were injured in the accident
including your self
□ This includes friends, carpool riders and anyone else in the vehicle
○ Uninsured Motorist Protections
§ Covers injuries that occurs to you & family, in most states this wont cover
property damages
- No Fault Insurance
○ When drivers involved in an accident collect medical expenses, lose their wages &
related injury costs from their insurance - they don’t have to pay out of pocket
§ The reality is that it varies from state to state, some have set limits on the
costs of medical assistance, lost claims & settlements
§ Other states will assist 100% but only in certain circumstances
□ i.e. permanent damages leading to paralysis or the death of a loved one
§ Some states include property damage in no fault insurance
- Motor Vehicle Property Damages Covered
○ There are 3 types of coverages to protect you from financial loss to property
damages & other damages done to your car
1. Property damage liability
- This coverage mainly applies to cars, but it also includes street signs, lamp
posts & other public street property
2. Collision
- Pays for damages done to the car regardless of who is at fault HOWEVER
if the person who caused the accident is identified, it will come out of
their insurance and the other persons
- Subrogation
® The insurance company’s right to recover the amount its pays for
from the loss from the person responsible
3. Comprehensive physical damage
- Covers the risks involving fire, theft, broken glass, falling objects,
vandalism & accidents caused by nature and/or animals
® Wind, hail, flood, tornado, lightening, earthquakes etc
- Other Automobile Insurance Coverages
○ Wages lost insurance
§ This will reimburse you for any for any salary/income lost due to a car
accident
○ Towing & Emergency Road Service
§ Covers the cost of breakdowns & mechanical assistance
- This can be very helpful for those long road trips
§ This also covers getting the car to a service station & roadside assistance but
not the actual repair of your vehicle
- Think AAA
○ Amount of Coverage
§ Legal Concerns
- Most people can’t afford expensive court settlements so they opt for
automobile liability insurance
- In the past 10/20 coverage was considered adequate repayment in injury
related accidents, now that has risen 100/300 meaning a lawyer can sue
for 1 million instead of 100 dollars in the event of an accident
** Keep in mind some people might have a 25/50/10 type of
coverage
- This means $25,000 to cover an injured person
$50,000 to cover injuries per accident
$10,000 to cover property damages
§ Property Values
- Most policies can go as a high as $50,000 to $100,000
- Automobile Insurance
○ Car type
§ The year, make & model influence costs
- Expensive parts that need to be replaced, complications to the car
because of the style and/or insurance raises in costs because of amount
of times the car may have been stolen
○ Rating Territory
§ In some states this is where you live & is used to determine car insurance
premiums
○ Driver Classification
§ A category based on the drivers:
- sexual orientation, age, marital status, driving record & driving habits
§ These are all used to determine insurance rates
- Poor driving history leads to higher rates
○ Assigned Risk Pool
§ A group of people who are unable to get car insurance because of poor driving
history (aka lots of accidents) & must obtain coverage w/ high rates
- Reducing Automobile Insurance premiums
○ Comparing Companies
§ Net Quotes & look for your local consumer reports
○ Premium Discounts
§ Try to avoid accidents & traffic tickets/violations, most insurance companies
will owner your rates and/or offer discounts over time
Monday, April 13, 2026 1:22 PM
Insurance & Risk Management: An intro
- What is insurance
○ Insurance is a protection against possible financial loss, its there to give you peace
of mind when life happens, you will have money available to meet any needs for:
§ Accidents, medical expenses, to protect you home & belongings, to cover
personal damage to properties caused by a driving accident
○ Life Insurance
§ Replaces income that could be lost if the policy holder dies
○ Car Insurance
§ Helps cover both property & personal damage done caused by the
policyholders vehicle (the person who caused the accident)
○ Home Insurance
§ Secures damages done to a place of residence & its associated financial risks
- Insurance is all based on the principal of pooling risks
○ This is when policy holders pay thousands as a group
- An insurance company
○ AKA the “Insurer”, is a risk sharing company that agrees to take the financial
responsibility of losses that may happen from a risk
- A policy
○ When the insurer joins risk sharing group, they agree to assume the risk at a fee
- The premium
○ They agreed upon fee they have to pay
- Insured
○ The person who is covered by an insurance policy
Types of Risks
- Risk
○ The uncertainty and/or possibility of something happening
- Peril
○ The cause/reason of a possible loss
- Hazard
○ A factor that can increase the likelihood of something happening from peril
- Personal Risk
○ What can happen during the loss of income or a life due to unforeseen events
§ I.E. a death, disability, old age and/or unemployment
- Property Risks
○ Uncertainties of in/direct losses to personal and/or real property from a fire,
windstorm, accident, theft and/or other type of hazard
- Liability Risks
○ Possible losses from injury or harm done to others, i.e. car accident, work place
misconduct and/or injury on someone else’s property
- Pure Risk
○ Aka insurance risk, is the chance that a loss should occur only under specified
circumstances
- A Speculative Risk
○ Risks that carry the chance of either loss or gain
§ I.E. starting a small business
Risk Management Methods
- Risk Management
○ A strategy to protect assets & people from financial loss caused by destructive
events
- Types of Risk management
1. Risk Avoidance
a. You can avoid a car accident by being the passenger, risk avoidance just requires
practical choices
2. Risk Reduction
a. You can avoid risks by being aware & taking precautions as needed
3. Risk Assumption
a. Taking responsibility for the loss or injury that may result from a risk
- Self Assurance
§ The process of establishing monetary value to cover the costs of a loss
4. Risk Shifting
a. Transferring it to an insurance company and/or another type of financial
organization
- A deductible
§ A set amount a policy holder must pay per loss on an insurance policy
Planning an Insurance program
- This type of program can be changed for the individuals needs
-
Your Personal Insurance Program
1. Set Insurance goals
a. Your goal is to minimize personal, property & liability risks
i. Being prepared in the event of a death, having insurance for a car vs paying
out of pocket, disability, loss of a job etc
2. Develop a plan to reach your goals
a. Be aware of risks you might run into & what you can handle w/o a big loss
b. What resources will help you reach your goals?
i. Public programs, personal assets, family/church support, reliability of various
insurers and/or private risk sharing programs
3. Put your plan into action
a. Budget as you go to attain your goal, purchase additional coverage if needed
b. The best plan allows for flexibility, financially, in contracts allowing for changes &
knowing what will work best at your price range
i.e. think of a car, for your first car it might be simple w/ basic insurance but
the financial loss will be easier to manage vs a new car & a high insurance
policy, be sure its something you can afford
4. Review your results
a. Evaluate your plan periodically, ask your self if this works? Be aware of any change
you might need to make to protect your assets
b. What major life changes need to be looked at? I.e. A couple having a baby
c. The needs of a single person vs a family vs a couple are all very different
i. In each case you will have to ask yourself if you have provided yourself w/
enough resources to care for basic needs & responsibility for your own well
being & that of others
Property & Liability Insurance
- The main types of risks related to homes & cars are:
○ Property damages & loss
§ Physical damages
□ Damage caused by fire, wind, water and/or smoke that are temporary
§ Loss of Use
□ This is when an item of value has been stolen, vandalized or arson (lost to
a fire beyond repair)
○ Liability protection
§ Liability
□ A legal responsibility for the financial costs of another persons
losses/injuries
§ Negligence
□ A failure to responsible action in a situation
§ Vicarious Liability
□ When someone is responsible for the actions of another person
Home & Property Insurance
- Homeowners Insurance
○ Coverage to protect your place of residence & its associated financial risks such as
damage to the property or the injury of others
- Homeowners Insurance Coverages
○ Houses & other structures
§ A dwelling or other attached structures are covered under insurance &
protected from any damages
○ Additional Living Expenses
§ Pays for the cost of living temporarily in a separate location while your home
is being repaired
§ Some policies are limited time wise and/or add an additional 10-20% cover
charge, while others may cover costs up to a year
○ Personal Property
§ Household belongings like clothes, furniture & appliances can be insured up to
75%
§ Other common types of property w/ a coverage limit include jewelry valuing
$1,000, firearms valuing $2,000 & silverware valuing $2,500
○ Personal Property Floater
§ Covers damages/losses of a specific high value item
§ Requires a detailed description of the item & appraisal history to verify
current value
○ Household Inventory
§ A documented list of personal belongings, purchase dates & cost information
which can all be retrieved from either an insurance agent or online
□ Items of special value should have receipts, serial numbers, model names
& written appraisals of value
Personal Liabilities & Related Coverages
- The Risks of financial losses
○ A neighbors/guest being injured on your property leading to disability for life
○ A spark starting a fire on your property & damages your neighbors roof
○ Family accidentally damaging property value while visiting someone else’s home
- In each situation you are held responsible for the costs in legal action and/or claims
- An Umbrella Policy
○ AKA Personal Catastrophe Policy, replaces your basic needs under a liability
coverage
○ This also protect you in the event of slander (someone trying to discredit your
name), defamation of character (spreading rumors about you) & invasion of
property
§ Liability policies are sold for $1 million & useful to those of substantial net
worth
□ I.E. a business owner and/or public figure
- Medical Payments Coverage (The Homeowner)
○ Pays the costs of accidents on your property & minor injuries caused by family or
pets
- Supplemental Coverage
○ An insurance that pays for minor inconveniences, this protection is limited to
$500-$1,000
- Specialized Coverages
○ Homeowners insurance doesn’t usually cover natural disasters, The National Food
Insurance Program offers this service, an agent from FEMA can provide additional
info
§ FEMA (Federal Emergency Management Agency)
- Endorsement
○ An additional coverage to the homeowners policy that can be added to specialized
coverages
Beware: When Home insurance coverages collide
- Do you need the flood insurance?
○ Be sure that your property is covered by any additional insurances being sold or
you might need a separate insurance
- The Risk
○ Is your home located in a flood zone? Look for a map of ask you city hall what
precautions you can take
○ Keep up to date w/ flood risks in your area
- Flood insurance
§ If your insurance doesn’t have flood coverage call 1(800)225-3566 or visit CA
Flood Insurance for more info
- What is costs
○ The average policy starts at $700/yr, can vary on coverage based on location risks
& your deductible
- What is covered?
○ The policy can cover your home up to $250,000, a separate policy will be needed
for lost belongings that can cover up to $100,000
- There’s a wait
○ Most policies have a 30 day waiting period to access benefits - don’t wait until the
last minute
- Resources
○ Use FEMA’s Historical Flood Risk & Cost data evaluate the flood risks in your area
FEMA - Flood Maps
Renters Insurance
- Only 4 out of 10 people have renters insurance
○ Renters insurance covers
§ Financial losses/damage against personal property
○ Tenants who pay rent are not covered by renters insurance & can be charged for:
§ Faulty wiring
§ Damages done to the building near their unit
○ Personal belongings are usually covered in student housing under their parents
§ Unless you live off campus - you should considered adding a separate policy
○ Renters insurance is usually affordable & has the same protections as homeowners
insurance
Home Insurance Policy Forms
- Until the mid 1950’s all types of insurances for the home were all separate policies and
were later sold as a package
○ Be aware that some of these assurances don’t always apply to a mobile home
Home Insurance Cost Factors
- How much coverage is needed?
○ Your insurance protection should be based on the amount needed to
rebuild/repair your home
- Coinsurance Clause
○ The homeowner must pay for part of the losses if the property was not insured for
that specified amount of replacement value
- Insurance companies base claim settlements on two methods to finance a home
○ Actual Cash Value (ACV)
§ A claim settlement method that insures payment based on the cost of an item
and/or replacement
○ Replacement Value
§ A payment given to you based on the price of the original item replaced
and/or if the items can depreciate less than the original
- Factors that affect home insurance costs
○ Location
§ What is the usual weather like in this area?
○ Type of Structure
§ Construction materials used to build the home influence what type of
coverage is needed
○ Coverage amount & policy type
§ The policy you pick w/ its limits affect the minimum that you pay
Reducing Home Insurance Costs
- Home Insurance Discounts
○ Most companies offer discounts towards your premium if:
§ You install a smoke detector
§ Add a fire extinguisher
§ Have a dead-bolt lock on the doors
§ Add an alarm system to the home
- Company Differences
○ You can save 30% on homeowners insurance by comparison shopping before
deciding who to use as your insurer
§ Consider services & coverages offered
§ Not all companies will cover claims the same way
§ Use Consumer Reports website to comparison shop
Automobile Insurance Coverages
- On average cars cost $250 billion in accidents, lost wages & medical costs
- The National Traffic Safety Administration states the following as factors:
○ Alcohol, texting & prohibited cell use are half of these costing $30 billion
- A Financial Responsibility Law
○ A state legislation requiring drivers to prove their ability to cover costs of damages
incurred and/or injuries from the accident
- Motor Vehicle Bodily Injury Coverages
○ Bodily Injury Liability
§ Covers financial risks lost to legal & medical expenses, lost wages and/or other
expenses that were lost from a car accident
§ Uninsured and/or under insured motorist protections
○ Medical Payments Coverage
§ Cover the costs of healthcare for those who were injured in the accident
including your self
□ This includes friends, carpool riders and anyone else in the vehicle
○ Uninsured Motorist Protections
§ Covers injuries that occurs to you & family, in most states this wont cover
property damages
- No Fault Insurance
○ When drivers involved in an accident collect medical expenses, lose their wages &
related injury costs from their insurance - they don’t have to pay out of pocket
§ The reality is that it varies from state to state, some have set limits on the
costs of medical assistance, lost claims & settlements
§ Other states will assist 100% but only in certain circumstances
□ i.e. permanent damages leading to paralysis or the death of a loved one
§ Some states include property damage in no fault insurance
- Motor Vehicle Property Damages Covered
○ There are 3 types of coverages to protect you from financial loss to property
damages & other damages done to your car
1. Property damage liability
- This coverage mainly applies to cars, but it also includes street signs, lamp
posts & other public street property
2. Collision
- Pays for damages done to the car regardless of who is at fault HOWEVER
if the person who caused the accident is identified, it will come out of
their insurance and the other persons
- Subrogation
® The insurance company’s right to recover the amount its pays for
from the loss from the person responsible
3. Comprehensive physical damage
- Covers the risks involving fire, theft, broken glass, falling objects,
vandalism & accidents caused by nature and/or animals
® Wind, hail, flood, tornado, lightening, earthquakes etc
- Other Automobile Insurance Coverages
○ Wages lost insurance
§ This will reimburse you for any for any salary/income lost due to a car
accident
○ Towing & Emergency Road Service
§ Covers the cost of breakdowns & mechanical assistance
- This can be very helpful for those long road trips
§ This also covers getting the car to a service station & roadside assistance but
not the actual repair of your vehicle
- Think AAA
○ Amount of Coverage
§ Legal Concerns
- Most people can’t afford expensive court settlements so they opt for
automobile liability insurance
- In the past 10/20 coverage was considered adequate repayment in injury
related accidents, now that has risen 100/300 meaning a lawyer can sue
for 1 million instead of 100 dollars in the event of an accident
** Keep in mind some people might have a 25/50/10 type of
coverage
- This means $25,000 to cover an injured person
$50,000 to cover injuries per accident
$10,000 to cover property damages
§ Property Values
- Most policies can go as a high as $50,000 to $100,000
- Automobile Insurance
○ Car type
§ The year, make & model influence costs
- Expensive parts that need to be replaced, complications to the car
because of the style and/or insurance raises in costs because of amount
of times the car may have been stolen
○ Rating Territory
§ In some states this is where you live & is used to determine car insurance
premiums
○ Driver Classification
§ A category based on the drivers:
- sexual orientation, age, marital status, driving record & driving habits
§ These are all used to determine insurance rates
- Poor driving history leads to higher rates
○ Assigned Risk Pool
§ A group of people who are unable to get car insurance because of poor driving
history (aka lots of accidents) & must obtain coverage w/ high rates
- Reducing Automobile Insurance premiums
○ Comparing Companies
§ Net Quotes & look for your local consumer reports
○ Premium Discounts
§ Try to avoid accidents & traffic tickets/violations, most insurance companies
will owner your rates and/or offer discounts over time
