Unit 5: Transportation

Lesson 3: Owning a Car

Topic 3: Car Insurance

OBJECTIVE

1. Define the different types of auto insurance coverage.

MATERIALS
Auto Insurance Coverage

SUPPLEMENTAL MATERIALS
Insurance (Individual Title from the Survival Skills Reading or Cassette Unit) – A $9.95 workbook by Phillip Roy, Inc. (1800 255-9085).

Janus Life Skills: Shopping and Caring for Cars – A $7.95 workbook by Globe Fearon (1800 848-9500).

Insure Yourself: A guide to insurance – A $6.95 workbook by Globe Fearon (1800 848-9500).

INSTRUCTIONAL FORMAT
Buying car insurance is a necessary part of owning a car, and an additional cost. The cost is going to depend on many factors such as a person's age, type of car, where you live, whether you are married, and your driving record. Plus, different insurance companies will charge different rates. In addition, each state has different laws about how much insurance a person needs to carry. A suggestion for trainers is to try to make contact with an insurance agent who might be willing to provide this training as a free service. It is a good way for the agent to drum up business, but make sure he spends his time talking about insurance in general and not what his company can do for the student.

1. Discuss how car insurance works. There are three basic monetary factors to consider: amount of coverage, deductible, and premium. The amount of coverage is the maximum amount a person receives when there is an accident, a theft, or some other damage to the car. These are generally figures that can be increased or decreased by $10,000, depending on how much coverage you get. Common figures are $10,000, $50,000, $100,000, etc. The deductible is the amount you pay outright before you get any money from the insurance company. This figure is usually around $250-$500. The premium is the amount you pay on a regular basis for your coverage. Thus, you may pay $50 a month for insurance to cover injuries and property damage up to $100,000 with a deductible of $500. This means that if you drive your car into a tree and as a result have $10,000 in doctor's bills and need to replace your car that was worth $7,500, the insurance company will give you $17,500, less the $500 deductible, for a total of $17,000. This is very simplistic, but it will give people an idea of how the process works. Remind students that while the insurance company will provide the payment, they will probably raise your premiums.
   
   

2. Review the various types of coverage. The information is on a sheet that the students can take with them.

SIGNS OF GENERALIZATION
Students make informed decisions when purchasing auto insurance. This information can always be reviewed by an insurance agent.

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