The Open Road
A vehicle can be a symbol of
freedom, but it requires
responsibility.
What responsibilities come
along with owning and
operating a vehicle?
Lesson Objective
Use tables to compute the annual premium for vehicle
insurance.
Content Vocabulary
liability insurance
collision insurance
comprehensive
insurance
liability insurance
collision
comprehensive
insurance
insurance
Provides
Pays
for damage
financialto
protection
the insured
to the
vehicle
policyholder
caused
from
losses
by adue
against
collision
to fire,
claims
with
vandalism,
another
for bodily
motor
theft,
injuryjust
vehicle
and
and
orabout
an
property
object
any cause
damage
such as
other
as
a telephone
athan
result
a
of an accident.
pole.
collision..
Lesson Objective
Use tables to compute the annual premium for vehicle
insurance.
Content Vocabulary
deductible clause
annual premium
deductible
annual
premium
clause
The
A
clause
amount
in an
you
insurance
pay eachpolicy
year that
for
requires the
insurance
coverage.
insured to pay a certain
amount before the insurance
company pays.
Example 1
Della Welch is the principal operator of her
vehicle. Her driver-rating factor is 2.20. Her
insurance includes 50/100 bodily injury and
$50,000 property damage. Her vehicle is in
age group A and insurance-rating group 13
(or A, 13). She has $50-deductible
comprehensive and $50-deductible collision
insurance.
Example 1 (cont.)
What is her annual base premium?
What is her annual premium?
(Use Figure 9.3 on page 351 of your
textbook to find important information for
this problem.)
Example 1 Answer: Step 1
Find the annual base premium.
Liability + Comprehensive + Collision
Premium
Premium
Premium
$237.20 + $108.00 + $287.20 = $632.40
Example 1 Answer: Step 2
Find the annual premium.
Base Premium × Driver-Ratio Factor
$632.40 × 2.20 = $1,391.28
Example 2
Use Figure 9.3 on page 351 of your textbook. Soseki
Nagamatus has a driver-rating factor of 3.1. His
insurance includes 100/300 bodily injury limits and
$100,000 property damage limits. His vehicle is in
age group B and insurance-rating group 15 (B, 15).
He has $50-deductible comprehensive and $50deductible collision insurance.
What is his annual premium?
What is annual base premium?
Example 2 Answer: Step 1
Find the annual base premium.
Liability + Comprehensive + Collision
$272.40 + $128.40 + $311.20 = $712.00
Example 2 Answer: Step 2
Find the annual premium.
Base Premium × Driver-Rating Factor
$712.00 × 3.1 = $2,207.20
Practice 1
Driver-rating factor: 2.0.
Age, rating group: C, 15.
Coverage: 300/300 bodily injury, $100,000 property
damage, $50-deductible comprehensive, and $50deductible collision.
What is the annual base premium?
What is the annual premium?
Practice 1 Answer
Annual base premium: $720.80
Annual premium: $1,441.60
Practice 2
Jason Edwards drives his car to and from work and
for pleasure. His driver-rating factor is 2.50. He has
$50-deductible comprehensive, $50-deductible
collision, 50/100 bodily injury, and $50,000 property
damage insurance. His vehicle is classified as D, 14.
What is his annual base premium?
What is his annual premium?
Practice 2 Answer
Annual base premium: $607.60
Annual premium: $1,519