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Coverage Advice for New Drivers

2015-09-10 15:20:00

"The best way to keep children at home is to make the home atmosphere pleasant, and let the air out of the tires." says Dorothy Parker

New drivers, particularly young drivers, need years to learn to avoid simple mistakes on the road. The challenge is getting the correct coverage and making sure you have can afford to do it. I’m not going to lie; it will be expensive just because they are newbies to the road.

 

Coverage Suggestions:

Below are some recommendations on coverage to protect the driver - and your assets from a claim lawsuit.

 

  • Increase your liability limit
    • This section of the auto policy pays for the medical expenses of people that you or your family members injure in a crash. We often see a “100/300” limit. For example, a $100,000/$300,000 limit will pay a maximum of $100,000 for a single person’s injuries and up to $300,000 total for the injuries of everyone in the car you hit. Average daily cost for the intensive care unit is $34,257, according to the American Association for the Surgery of Trauma, this gives you less than three days of coverage.
    • We recommend $500,000/$500,000 limits to protect your assets and future earnings from a lawsuit resulting from an accident. This limit has coverage for two weeks in the intensive care unit. Double or triple the limit doesn’t mean it will double the premium.
  • Increase your property damage limit
    • The property damage limit on the auto policy pays for damage you cause to other people’s property or vehicles.
    • Look around at prices of new vehicles. Now imagine an accident with multiple cars. What if they hit a semi-truck? Do you have a limit to cover the rig and what’s inside?
    • We recommend $500,000 limits for property damage.
  • Buy an older vehicle that doesn’t need a loan to avoid comprehensive and collision coverage
  • Look into roadside assistance or towing and labor coverage in case they don’t have basic car repair skills
  • Accident forgiveness will get you 1 get out of jail free card for an at fault accident. You pay the deductible to get the car fixed but don’t pay an increase in premium at renewal. Penalties for a youthful driver accident can increase your premium hundreds of dollars a year.
  • Get an umbrella policy to protect your overall assets. This additional limit will provide another 29 more days in the intensive care unit. What is an umbrella policy? Find out.

 

Savings:

Below are a few ways to get relief from the premium.

  • Good student discount. All those A's can add up. Single, full-time students under the age of 25 can save for getting good grades.
  • Increase the deductibles on your vehicles. The savings will be a benefit but also reduce the small claims that can hurt your premium in the long run.
  • Reduce an older vehicle from full coverage to liability only, meaning if your car is damaged there isn’t coverage to repair it but you still have coverage for damage or injuries to others.
  • Automatic billing discount. Some companies will give a discount if you set up automatic billing from a checking or savings account and go paperless.

 

Each situation is different and it’s always in your best interest to talk to an agent. The best agents ask lots of questions because gaps happen when we don’t have all the information. New drivers, particularly young drivers, have higher insurance rates for 2 reasons: inexperience behind the wheel and immaturity. Just like anyone attempting to master a new skill, teen drivers tend to make mistakes and take risks that more experienced drivers won't. And increased risks translate to increased insurance rates.

The numbers paint a clear picture. Though teen deaths in car crashes have dropped dramatically since 1975, the figures are still staggering: 2,823 teenagers aged 13 to 19 died in motor vehicle crashes in 2012. And despite the drop, motor vehicle accidents remain the number-one cause of death for teenagers.

Teenagers are also the most likely to be involved in accidents, with 16-year-old drivers over 2.5 times more likely to be in a crash than 20- to 24-year-olds.

 

Questions about your specific situation or want a quote? Please call our office at 701-237-6414 and ask for Denise, Becky or Jessica. You can also email me at jebeling@warnerandcompany.com.