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It’s Nobody’s Fault! All that sorting out of who caused the accident and which driver was at fault became very expensive and time-consuming as more and more Americans took to the road. That prompted some states to enact no-fault laws . That means there is no need to determine fault. If you live in a no-fault state, each party in a car accident is responsible to have insurance and to seek recovery from their own insurer after an accident. Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah, and Puerto Rico are no-fault states, although be aware that there are differences as to what these states interpret as “no-fault”. Deductible. Car insurance policies have deductibles. A standard deductible is $500. For example, say you back your car into a pole and smash the bumper and rear tail light. The cost of repair is $1500. If your deductible is $500, you must come out of pocket that amount before the insurance company will pay their share of $1000. Obviously, if the cost of repair is $500, it’s not worth making a claim on your policy. Miscellaneous Car Insurance Benefits. Other auto-related insurance policy options are rental reimbursement coverage which provides you with a rental car while your damaged car is being repaired, and Emergency Road Service which provides roadside assistance if your car breaks down or has to be towed to a repair shop. Reflect on Learning. Can you list types of auto insurance and the losses they cover? Bodily injury, property damage, collision coverage, uninsured motorist, comprehensive. You can also get rental car reimbursement and roadside service insurance. Can you state in your own words what 100/300/50 means? What if losses from a car accident exceed the policy limits? That is when having umbrella insurance would be a great advantage! Health Insurance Health insurance is a popular employee benefit because uncovered healthcare costs, even for a relatively minor illness or injury, can cause big financial losses. Understanding health insurance can be challenging. Knowing how your healthcare plan works is important because if you don’t follow plan requirements, you can inadvertently incur medical costs that are not covered by the insurer. To be financially literate you should have a basic knowledge of healthcare insurance. Plan Documents. Your first encounter with a health insurance plan will probably be on the first day of a new job. The HR department will hand you tons of paperwork explaining your employee benefits, including the healthcare plan. Healthcare Plan documents , particularly the Summary of Benefits and Coverage , are important because they tell you exactly how your health plan works, what your coverage is, and how to avoid running up uncovered charges. Don’t set the plan documents aside and forget about them! Take some time to read through them and keep them close at hand because you may have to refer to them often. Costs. Remember — an important financial literacy concept is that the insured almost always pays some portion of the costs out of their own pocket. Healthcare plans require the insured to pick up part of the cost of their own health care. These can include: PRODUCT PREVIEW
Chapter 15 | Protect What You’ve Earned 290
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