Automobile Insurance

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1. Editorial Calendar
2. Topic of the Week
3. Teaching
4. Learning Activity

• Life Insurance
• Health Insurance

Automobile Insurance is a contract that you, the
policyholder, enter into with the insurance company
to protect you from financial loss or damages, caused
by an automobile accident or theft.

By "writing" an insurance policy, the insurance company
hopes that you will not get into a car accident during
the term of the insurance (generally, one year). If you
do not have a claim, the insurance company will
profit from the amount of money you paid (premium).

In the instance that you have an accident, your insurance
company will pay the amount of money owed for the
damages. In this case, you would be responsible to pay
the deductible and your monthly premium.

Many states will "cap" the insurance rates charged by
insurance companies that are allowed to sell within your
state. However, your premium amounts are based on
your variables. Variables may include: your age, driving
record, type of car you purchase, where you live, car
alarm system, marital status, airbags, driving records of
other family members, the value of the car or what you are
intending to use the vehicle for.

As you get older, your insurance cost will decrease
depending upon your driving record. Many states use a
step or point system to determine your rate. Traffic violations
will automatically be added to your insurance and cause a
rate increase, for years to come.

Premium

The amount of money that you pay each month
to maintain the insurance policy.

The filing on an accident or theft of your vehicle.

Intended to protect you from financial loss and
for your legal defense in the case that you are
legally responsible for injuries to another person.
It is generally required by law that you maintain
this coverage.

Insurance coverage that will pay you for damages
resulting from a collision (with an object) or a rollover.

Coverage for all other damage to your car from damages
resulting from events such as a fire, flood, hail, falling
trees, glass breakage, windstorm, vandalism or damage
from a bird or animal.

When your insurance company pays for a claim, regardless
if you are at fault or not.

A deductible is an amount of money that the
insurance policy holder is responsible for paying.

A deductible is considered the amount of risk that
a person is willing to take on. The less risk or lower
deductible that you are willing to pay would result in
a higher insurance premiums.

As an example, if you were to get into a car accident
and the claim was for $10,000 and you had a $500
deductible, you would only be responsible for $500 and
the insurance company would cove the remaining $9,500.

In teaching students about Auto Insurance, it is important
for them to understand what factors can increase their
insurance rates.

If students understand the factors or variables that they can
control, they will have the power to change their situation
and keep their rates low.

Do you feel obligated to an insurance broker
because they have had your account for a few years,
or because they may be affiliated with your bank,
church or office? You may save your family
thousands of dollars a year, just by spending a
few minutes to shopping around for competitive quotes.

According to Consumer Reports, the average annual
insurance premium vary depending upon vehicle type:

Also, look for a car that is not in the high theft list. To
see if your car is considered of value to thieves, visit
http://www.hwysafety.org.

Attending a certified driving school could save
you up to 10% on your insurance rates.

Those who pay their bills on time will benefit from
lower costs on insurance premiums.

Same carrier discounts.

Check with your insurance carriers, about combining
your house / apartment insurance with an automobile
policy, you may save up to 15% each year.

Use group discounts such as AAA or a teachers union
to lower your rates. Sometimes you can save up to 5%.

• For your child to learn how to compare rates and
  benefits between insurance companies.

• Save you money on insurance in the process.

• Internet research
• Comparisons
• Budgeting

Time: 30 - 40 Minutes

This exercise will need a parent to work with a student in
order to complete.

The lesson plan calls for your child work with you to compare
insurance rates between insurance brokers, teach them how
to price insurance and experience what types of questions are
asked.

Note: After completing this exercise, you will receive calls from
insurance brokers. The idea behind this is to let your student
experience talking to brokers, comparing prices and learning
how to purchase an insurance product. It is a life long learning
skill. Remember, you are under no obligation to purchase
anything after you complete the exercise.

Step One.

Visit eloan.com
This will take you to Eloan.com, at which point you would
enter your first name, zip code and what type of insurance you
are in the market for.

Step Two.

Complete the questions and wait for calls.

1. List three ways how you can lower your insurance premiums?

2. How does the insurance company make a profit?

3. What variables could you change to lower your premiums?

4. How does a family member's driving record affect your
insurance rates?

5. Which insurance company did you choose and why?

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