Let’s imagine you have just purchased a used car! Congratulations! Your used car is a 2014 Red Ford Focus. In order to drive your car, you must have auto insurance. In this activity, you will choose the coverage that meets your needs, but also satisfies your state’s requirement. You will look at 6 of the main types of auto insurance coverages. For the purposes of this activity, let’s assume the following:You are 18 years old Are driving a 2014 Red Ford FocusCommuting to work and school five days a week (15 miles each way)Expecting to drive 15,000 miles per yearResearch the minimum requirements for automobile coverage in your state. You are only required to choose a coverage option if it’s required in your current state. Identify the forms of insurance that are required out of the following:Bodily Injury LiabilityProperty Damage Liability Personal Injury Protection Uninsured/Underinsured Motorist CoverageCollisionComprehensiveBodily injury coverage helps you pay for another person’s physical injuries in a car accident when you are at fault. Review the options below. Write down the bodily injury coverage you would purchase. Briefly, describe why you choose this coverage.Bodily Injury Coverage Option 1Option 2Option 3Coverage LimitPer person/ per occurrence$25,000/$45,000$50,000/$100,000$125,000/$300,000Monthly Premium $25$60$85Property damage coverage helps you pay for another person's property (car, house, fence, mailbox, etc.) in a car accident when you are at fault. Review the options below. Write down the property coverage you would purchase. Briefly, describe why you choose this coverage.Property Damage CoverageOption 1Option 2Option 3Coverage Limit$15,000$30,000$75,000Monthly Premium $25$50$75Uninsured or under insured coverage covers repairs and other expenses to your car if another driver with not enough insurance injures you or someone you are riding with. Review the options below. Write down the uninsured or under insured coverage you would purchase. Briefly, describe why you choose this coverage.Uninsured/Under insured Motorist CoverageOption 1Option 2Option 3Coverage Limit$15,000/$30,000$50,000/$100,000$100,000/$300,000Monthly Premium$40$55$75Personal injury protection (PIP) can help cover some of your medical costs in a car accident. Remember you are not required to choose a coverage option that is not required in your state. Is your premium what you expected? Would you make any changes? Explain your answer. What do you think will happen to your monthly premium as you become older (and have no accidents)? 6 sentences
Based on the coverage options provided, I would choose Option 2 for Bodily Injury Coverage ($50,000/$100,000) as it provides a higher coverage limit in case of an accident. For Property Damage Coverage, I would choose Option 2 ($30,000) as it also offers a higher coverage limit. For Uninsured/Underinsured Motorist Coverage, I would choose Option 2 ($50,000/$100,000) for the same reason.
In terms of Personal Injury Protection, I would not choose this coverage as it is not required in my state and I want to keep my monthly premium as low as possible. I might make adjustments to my coverage options as I become older and have no accidents, as my premium could potentially decrease. As I gain more experience on the road and have a clean driving record, my insurance premium is likely to decrease.