What You’ll Learn • How to explain the purpose of financial responsibility law (p. 351) • How to describe the types of automobile insurance (p. 351)
Why It’s Important Knowing about the different types of automobile insurance coverage will help you buy the best policy for your needs.
Legal Terms • financial responsibility law (p. 351) • bodily injury liability insurance (p. 352) • medical payments insurance (p. 352) • uninsured motorist insurance (p. 352)
Legal Terms • underinsured motorist insurance (p. 352) • property damage liability insurance • (p. 353) • collision insurance (p. 353) • comprehensive insurance (p. 354) • no-fault insurance (p. 355)
Section Outline Financial Responsibility Types of Motor Vehicle Insurance Bodily Injury Coverage Property Damage Coverage No-Fault Insurance
Pre-Learning Question What is a financial responsibility law?
Financial Responsibility Every state has a financial responsibility law, which requires vehicle owners to prove they can pay for damages or injury caused by an automobile accident.
Financial Responsibility You may show proof of financial responsibility by • depositing money • depositing bonds or other securities • carrying insurance
Financial Responsibility As of 2000, more than 40 states had laws requiring people to carry automobile insurance.
Pre-Learning Question What are the different types of motor vehicle insurance?
16.2 Types of Motor Vehicle Insurance
Bodily Injury Coverage The main types of bodily injury coverage are • bodily injury liability insurance • medical payments insurance • uninsured motorist insurance • underinsured motorist insurance
Bodily Injury Coverage Bodily injury liability insurance protects the insured against claims or lawsuits for injuries or death caused by negligence.
Bodily Injury Coverage Medical payments insurance pays for medical, and sometimes funeral, expenses resulting from bodily injuries to anyone occupying the policyholder’s car in an accident.
Bodily Injury Coverage Uninsured motorist insurance provides protection when the insured is injured in an automobile accident that is caused by a driver who has no insurance. It also protects parties who are injured by a hit-and-run driver.
Bodily Injury Coverage Underinsured motorist insurance protects you when another driver has insurance, but not enough to pay for any injuries.
Property Damage Coverage The main types of property damage coverage are • property damage liability insurance • collision insurance • comprehensive insurance
Property Damage Coverage Property damage liability insurance applies when you damage the property of others, including such things as another car, a house, a telephone pole, or a tree.
Property Damage Coverage Collision insurance covers damage to your vehicle when it is in an accident and pays for vehicle repairs, regardless of who was at fault.
Property Damage Coverage Comprehensive insurance applies to damage to your vehicle from sources other than collision, including fire, theft, lightning, flood, hail, windstorm, riot, and vandalism.
No-Fault Insurance Under no-fault insurance, regardless of who caused the accident, all drivers involved collect money from their own insurance companies.
No-Fault Insurance Because no-fault systems vary by state, you should investigate the coverage provided by no-fault insurance in your state.
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. Match the type of automobile insurance with its description.
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. continued
ANSWER • D • A • B • C
Section 16.2Assessment Reviewing What You Learned • Describe bodily injury liability insurance. What does it cover?
Section 16.2Assessment Reviewing What You Learned Answer It protects the insured against claims or lawsuits for injuries or death caused by negligence.
Section 16.2Assessment Reviewing What You Learned • What type of insurance protects parties who are injured by hit-and-run drivers?
Section 16.2Assessment Reviewing What You Learned Answer Uninsured motorist insurance
Section 16.2Assessment Critical Thinking Activity Fair Rates Teenage boys pay a much higher rate for automobile insurance than teenage girls do. Is this fair? Explain why or why not?
Section 16.2Assessment Critical Thinking Activity Fair 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?
Section 16.2Assessment Critical Thinking Activity Answer Fair Rates Answers will vary but should indicate the number of people actually surveyed.
Section 16.2Assessment Legal Skills in Action Motorcycle 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.
Section 16.2Assessment Legal Skills in Action Motorcycle Helmet Laws With a partner, debate whether people should be allowed to ride motorcycles without helmets. Does the requirement for insurance make a difference?
Section 16.2Assessment Legal Skills in Action Answer Motorcycle Helmet Laws Debates will vary but should recognize that motorcyclists need to be both personally and financially responsible for their choices.