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Automobile Insurance Types and Costs Brandon Dye Wednesday December 5, 2007 Outline of Lesson Financial Responsibility Law Penalties For Violation of Financial Responsibility Law Types of Insurance Coverage Insurance Costs Financial Responsibility Law

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automobile insurance types and costs

Automobile Insurance Types and Costs

Brandon Dye

Wednesday December 5, 2007

outline of lesson
Outline of Lesson
  • Financial Responsibility Law
  • Penalties For Violation of Financial Responsibility Law
  • Types of Insurance Coverage
  • Insurance Costs
financial responsibility law
Financial Responsibility Law
  • Requires that all registered motor vehicle owners have motor vehicle liability insurance or enough money to pay for any loses that may result from an automobile crash
  • Financial Responsibility Law requirements can be met in three ways.
ways to meet financial responsibility law requirements
Ways To Meet Financial Responsibility Law Requirements
  • Buy a liability insurance policy meeting the Virginia minimum standards.$25,000 for bodily injury/death of one person$50,000 for bodily injury/death of 2+ people$20,000 for property damage
  • Have proof of a surety bond by depositing cash or securities with the DMV
  • Pay a $500 uninsured motor vehicle (UMV) fee.This is good for 12 months and does not provide any insurance coverage.
you must show evidence you have met financial responsibility law when
You Must Show Evidence You Have Met Financial Responsibility Law When…
  • A police officer asks for proof of coverage
  • After getting in a collision
  • Registering a car or getting new plates
  • Obtaining or renewing a driver’s license
penalties for violation of financial responsibility law
A $500 Fine

Suspension of driver’s license and vehicle registration

High insurance premiums for the next three years

If you cause a collision you may be responsible for the losses by other people

If you cannot afford to pay for other people’s losses objects of value may be taken from you

Penalties For Violation of Financial Responsibility Law
types of insurance coverage

Medical/Loss of Income



Additional Liability


Uninsured/ Under Insured


Loss of Use

Rental Reimbursement

Additional Uninsured Motorist Coverage

Types of Insurance Coverage
liability insurance
Liability Insurance
  • Pays other people’s expenses for accidents caused by drivers covered under owner’s policy.
  • This type of insurance is required in Virginia.
  • Liability insurance pays for medical and funeral costs, lost wages, pain for suffering, car repair, car replacement, car rental, punitive damages and court fees.
  • The car owner, family members, and anyone driving the car with owner’s permission.
medical coverage
Medical Coverage
  • Pays for medical and/or funeral bills arising from motor vehicle accidents, including those in which the victim was a pedestrian or a bicyclist.
  • Covers the owner, owner’s family members, and passengers in the owner’s car.
uninsured underinsured motorist coverage
Uninsured/Underinsured Motorist Coverage
  • The amount of uninsured/underinsured motorist coverage you decide to purchase will equal the amount of your liability coverage unless you specifically request a lower amount.
  • Pays for loss from a hit-and-run driver, an uninsured motorist, or from a driver with not enough insurance coverage.
  • Covers medical bills, loss wages, pain and suffering, disfigurement, and permanent or partial disability.
collision coverage
Collision Coverage
  • Pays the cost of fixing or replacing owner’s car after an accident – regardless of who’s driving or to blame.
  • Collision pays you the current value of the stolen or destroyed vehicle. (prior to damage)
  • Company will not pay for a brand new current version of destroyed car.
comprehensive and towing labor coverage

Pays to replace or fix owner’s car if it is stolen or damaged by causes other than a collision such as fire, vandalism, or hail.

Coverage is limited to the actual cash value of the owner’s car minus the deductible.

Towing and Labor

Pays for towing charges when the owner’s car is disabled.

Also covers labor charges, such as changing a tire at the location the owner’s car became disabled.

Comprehensive and Towing/Labor Coverage
rental reimbursement and loss of use coverage
Rental Reimbursement

Pays for renting a vehicle if the owner’s car is disabled for over 24 hours because of a collision or comprehensive loss (fire/theft)

Loss of Use

Reimburses you for paying a car rental company for loss of use of a rental car, usually from a crash.

Rental Reimbursement and Loss of Use Coverage
more insurance types
More Insurance Types
  • Additional liability and uninsured motorist insurance can be bought to expand coverage.
  • Deductibles are an amount of money that the policy holder must pay prior to receiving coverage.
factors that influence insurance cost
Drivers Record: crashes, traffic violations, and insurance claims can raise premiums.

Drivers under the age of 25 pay high insurance rates.

Males are more likely to get in an accident, thus pay more than females.

Being single, having a sports car or SUV makes increases rates.

Students who receive good grades may lower premiums

Vehicle use and location are also taken into count.

Credit history and coverage selection may affect cost as well.

Factors that Influence Insurance Cost
insurance discounts
Annual mileage less than 7500 miles per year.

Policy renewal with no claims and a good record

Anti lock brakes

Air Bag System

Students away at school or have at least a B or 3.0 GPA.

Cars with automatic daytime running lights


Multi car policies

Senior citizens

Insurance Discounts