Personal Finance Chapter 10&11

Terms in this set (16)

a. Part A: Liability coverage- protects against loss resulting from lawsuits that might arise because of an auto accident
-can be combined single limit, where coverage applies to bodily injury and property damage liability without a separate limit for each person
- can be split-limit coverage which allows for either separately
b. Part B: Medical Expenses coverage- pays all reasonable medical and funeral expenses incurred within 3 years of an accident by policyholder, his or her family members, and other persons injured in an accident involving a covered automobile
-covers the policyholder and family regardless of whether they are in an automobile or walking on the street
-does not specify fault
c. Part C: Uninsured Motorist's Protection coverage- coverage for injuries caused by uninsured motorists, a negligent driver whose insurance company is insolvent, or a hit and run driver (15% of people have no auto insurance)
d. Part D: Damage to your automobile coverage- includes collision cost and other than collision cost or comprehensive physical damage coverage
-collision cost- portion of auto insurance covering damage resulting from accident with another vehicle or object
-other than collision loss- auto insurance coverage for non collision losses ex. car is hit in a parking lot.
-covers damage if car is hit in the parking lot or hit outside a collision
-losses are covered regardless of whose fault it is
-recommended limit is the cash value of your automobile
-premiums decline sharply as deductibles are raised
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