Section 16.2

Motor Vehicle Insurance Motor Vehicle Insurance Section 16.2Section 16.2

Understanding Business and Personal Law


Owning a Vehicle

What You’ll Learn

How to explain the purpose of financial How to explain the purpose of financial responsibility law (p. 351)responsibility law (p. 351)

How to describe the types of automobile How to describe the types of automobile insurance (p. 351)insurance (p. 351)



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Why It’s Important

Knowing about the different types of Knowing about the different types of automobile insurance coverage will help you automobile insurance coverage will help you buy the best policy for your needs.buy the best policy for your needs.



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Legal Terms

financial responsibility law (p. 351)financial responsibility law (p. 351)bodily injury liability insurance (p. 352)bodily injury liability insurance (p. 352)medical payments insurance (p. 352)medical payments insurance (p. 352)uninsured motorist insurance (p. 352)uninsured motorist insurance (p. 352)



Owning a Vehicle

Legal Terms

underinsured motorist insurance (p. 352)underinsured motorist insurance (p. 352)property damage liability insurance property damage liability insurance (p. 353)(p. 353)collision insurance (p. 353)collision insurance (p. 353)comprehensive insurance (p. 354)comprehensive insurance (p. 354)no-fault insurance (p. 355)no-fault insurance (p. 355)



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Financial Responsibility

Types of Motor Vehicle Insurance Bodily Injury CoverageProperty Damage CoverageNo-Fault Insurance

Section OutlineSection Outline



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Pre-Learning Question Pre-Learning Question

What is a financial responsibility law?



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Every state has a Every state has a financial financial responsibility lawresponsibility law, which requires , which requires vehicle owners to prove they can pay vehicle owners to prove they can pay for damages or injury caused by an for damages or injury caused by an automobile accident.automobile accident.

Financial Responsibility Financial Responsibility



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You may show proof of financial You may show proof of financial responsibility by responsibility by


depositing moneydepositing moneydepositing bonds or other securitiesdepositing bonds or other securitiescarrying insurance carrying insurance



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As of 2000, more than 40 states had As of 2000, more than 40 states had laws requiring people to carry laws requiring people to carry automobile insurance.automobile insurance.




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Pre-Learning Question Pre-Learning Question

What are the different types of motor vehicle insurance?



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16.216.2

Types of Motor Vehicle Insurance Types of Motor Vehicle Insurance



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The main types of bodily injury The main types of bodily injury coverage are coverage are

Bodily Injury Coverage Bodily Injury Coverage

bodily injury liability insurancebodily injury liability insurancemedical payments insurancemedical payments insuranceuninsured motorist insuranceuninsured motorist insuranceunderinsured motorist insuranceunderinsured motorist insurance



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Bodily injury liability insurance Bodily injury liability insurance protects the insured against claims or protects the insured against claims or lawsuits for injuries or death caused lawsuits for injuries or death caused by negligence.by negligence.




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Medical payments insuranceMedical payments insurance pays pays for medical, and sometimes funeral, for medical, and sometimes funeral, expenses resulting from bodily injuries expenses resulting from bodily injuries to anyone occupying the to anyone occupying the policyholder’s car in an accident. policyholder’s car in an accident.




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Uninsured motorist insuranceUninsured motorist insurance provides protection when the insured provides protection when the insured is injured in an automobile accident is injured in an automobile accident that is caused by a driver who has no that is caused by a driver who has no insurance. insurance. It also protects parties who are injured It also protects parties who are injured by a hit-and-run driver.by a hit-and-run driver.




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Underinsured motorist insurance Underinsured motorist insurance protects you when another driver has protects you when another driver has insurance, but not enough to pay for insurance, but not enough to pay for any injuries.any injuries.




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The main types of property damage The main types of property damage coverage are coverage are

Property Damage Coverage Property Damage Coverage

property damage liability insuranceproperty damage liability insurancecollision insurancecollision insurancecomprehensive insurancecomprehensive insurance



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Property damage liability insuranceProperty damage liability insurance applies when you damage the applies when you damage the property of others, including such property of others, including such things as another car, a house, a things as another car, a house, a telephone pole, or a tree.telephone pole, or a tree.




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Collision insuranceCollision insurance covers damage covers damage to your vehicle when it is in an to your vehicle when it is in an accident and pays for vehicle repairs, accident and pays for vehicle repairs, regardless of who was at fault. regardless of who was at fault.




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Comprehensive insuranceComprehensive insurance applies to applies to damage to your vehicle from sources damage to your vehicle from sources other than collision, including fire, other than collision, including fire, theft, lightning, flood, hail, windstorm, theft, lightning, flood, hail, windstorm, riot, and vandalism.riot, and vandalism.




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Under Under no-fault insuranceno-fault insurance, regardless , regardless of who caused the accident, all drivers of who caused the accident, all drivers involved collect money from their own involved collect money from their own insurance companies. insurance companies.

No-Fault Insurance No-Fault Insurance



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Because no-fault systems vary by Because no-fault systems vary by state, you should investigate the state, you should investigate the coverage provided by no-fault coverage provided by no-fault insurance in your state.insurance in your state.

No-Fault Insurance No-Fault Insurance



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Match the type of automobile insurance with its description.

Insurance Description

1. Bodily injury A. Pays for medical expenses resulting from bodily injuries to anyone occupying the policyholder’s car in an accident.

2. Medical Payment

B. Covers damage to your vehicle when it’s in an accident and pays for vehicle repairs.



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continued

3. Collision C. Applies to damage to your vehicle from sources such as fire, theft, and hail.

4. Comprehensive D. Insurance that protects the insured against claims for injuries caused by negligence.



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ANSWERANSWER

1.1. DD2.2. AA3.3. BB4.4. CC



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Reviewing What You Learned

1. Describe bodily injury liability insurance. What does it cover?

Section 16.2 Assessment



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It protects the insured against claims or lawsuits for injuries or death caused by negligence.


Answer



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2. What type of insurance protects parties who are injured by hit-and-run drivers?




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Uninsured motorist insurance


Answer



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Critical Thinking ActivityFair Rates Teenage boys pay a much higher rate for automobile insurance than teenage girls do. Is this fair? Explain why or why not?



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Critical Thinking ActivityFair Rates Then take an informal survey of the students in your class who have had tickets or accidents. Are the boys or girls better drivers?



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Critical Thinking Activity AnswerFair Rates Answers will vary but should indicate the number of people actually surveyed.



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Legal Skills in ActionMotorcycle Helmet Laws Florida recently passed a law allowing people to ride motorcycles without wearing helmets. However, Florida law requires unprotected riders to carry medical insurance in case of injury.



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Legal Skills in ActionMotorcycle Helmet Laws With a partner, debate whether people should be allowed to ride motorcycles without helmets. Does the requirement for insurance make a difference?



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Legal Skills in Action AnswerMotorcycle Helmet Laws Debates will vary but should recognize that motorcyclists need to be both personally and financially responsible for their choices.

Motor Vehicle Insurance Motor Vehicle Insurance End of Section 16.2End of Section 16.2

Section 16.2

Documents

Transcript of Section 16.2