Why is NJ insurance premiums the highest in the nation?
Population, high car density, labor costs, lawsuits, car theft
How do insurance companies determine your premium?
• Type of coverage • Amount of coverage • Driving experience• Type of car• Where you live• Where you drive• How much you drive• Your grades• Driver training• Driving record.
Why get insurance?
• To protect your assets
Assets:
Possessions (House, cars, boat, savings, stock, bonds….)
Appreciation/Depreciation
• Appreciation: When the value of something goes up. (Houses and properties when the economy is strong)
• Depreciation: When the value of something goes down. (Most cars)
Policy
• The written agreement between you and the insurance company.
Premium:
• the amount of money you pay the insurance company for coverage.
Liability (split limits) :
• pays for damages to others injured by you and property damage other than your own.
• This type of insurance that is mandatory in New Jersey
Collision:
• pays for damages to your own car that occurs due to an accident.
Deductible:
• You agree to pay a certain amount before the insurance company pays.
• The higher the deductible the less you pay for the premium.
This is part of your collision coverage or PIP.
Comprehensive:
• covers damages to your car due to vandalism, theft or “Act of God”.
Personal Injury Protection:
• This will pay for medical expenses due to a single car accident or the person that hit you did not have enough coverage.
Income Protection:
• This will allow you to collect part of your salary if you are out of work for an extended period of time.
Uninsured Motorist Protection:
• This protects you if you are in an accident with someone who does not have insurance.
Surcharge:
• These are additional charges to your insurance cost that you will receive for moving violations and accidents.
–DUI / $1000 each year for 3 years
–Refusal of Breath Test
–Driving without insurance
–Driving with a suspended license.
Split Limits of Liability
• Example: 15/30/5
• 15 (first #) Bodily injury per person up to $15,000
• 30 (second #) Bodily injury per accident up to $30,000
• 5 (third #) Property damage $5,000
You are in an accident where you hit another car with 3 people in it. One person has medical bills of $20,000. The other two people
have medical expenses of $8,000 and $2,000. The car had $4,000
worth of damage and you also hit a fence that cost $2,000 to replace.
Split Limits 15/30/5
• Policy Cost You
• Most injured:
• Other injuries:
• Damage car:
• Damage fence:
• Total Paid:
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