1. Letting Teens Drive Too Soon
It’s no secret that kids develop at different rates when they grow up and it’s no different for driving. While some kids are ready to drive younger than others (I was 14 when I started driving to school), it’s definitely a conversation parents should have with their kids. Some should wait to start driving because they are simply not prepared for the considerable responsibility. When you drive, you are in control of an object that is extremely large and fast moving and can cause serious injury and even death.
2. Insure your home and vehicles with two different agents
When you are shopping for your insurance, 99% of the time it is better to have everything with one company. When you have your policies with several different providers, chances are you won’t get the best rate. Almost all companies offer you discounts for having everything together and the most common are cars and homes. Over time, companies are giving discounts for having policies in addition to just auto and home. Many providers offer significant discounts for having multiple policies, such as life, commercial, umbrella, SUV, marine, and even rental properties.
Outside of price, having an agent will also make your life easier because you won’t have to deal with two different people, which will generally lead to two answers for everything. Not all agents are created equal, which is why finding someone you can trust, who has the knowledge to help you with any questions you may have, as well as recommending what is best for you, is so important (if not more important) than the price. .
3. Have limited liability coverage
One of the biggest mistakes you can make with your insurance is having low liability limits. In this day and age, lawsuits are more frequent than ever and payments only increase as medical costs steadily rise. If medical costs have increased 25 percent in the last five years, but you still have the same liability limits, you are now 25 percent more likely that a claim will exceed your liability limit.
There are many assumptions when it comes to insurance, and one of them is that having high liability limits is going to cost an arm and a leg. Actually, that’s the furthest thing from the truth. In many cases, you can double or triple your liability for less than one dinner trip each month. Is that meal really worth hundreds of thousands of coverage in the event of a liability claim? I do not believe it.
So what limits of liability should you have? While it will vary from state to state, I recommend having at least $ 500,000 in your auto policy and a $ 1,000,000 general policy as well. I know, you’re probably thinking why the heck would you need $ 1.5 million worth of coverage?
The first reason is that depending on the state you live in, you may not be able to file for bankruptcy for liability claims. What does this mean? This means that if you have $ 25,000 worth of liability on your car and seriously injure someone causing $ 300,000 worth of damage, you would be in a $ 275,000 bind. They can take away your car, your house, verify and even garnish your wages until the claim is paid. You should not only think about what you have to lose now, but also all the possible future gains that could be lost.
The second reason is that the average death claim is over $ 750,000, which means that even if you had $ 500,000 of liability on your car, which is generally the most an auto policy offers, you could still be hooked on a quarter of a million dollars.
With insurance, you have to consider the worst possible scenarios because that is why we have insurance. Ignoring this fact and buying low limits because you are unwilling to spend the equivalent of a dinner trip is doing yourself a disservice.
4. Failing to inform your insurance company that you have a new teen driver.
If you are withholding drivers knowingly, it could result in a claim denial. You could be paying for the insurance, but because you didn’t disclose a driver because you didn’t want to pay the additional premium, you may have to pay a claim in full. Sometimes it is difficult to bear that extra $ 100 a month for that new driver, but I can guarantee you that it would be much more difficult to bear the recovery of your home if your child were in a serious accident and your company rejected the claim because the home was rated poorly. inaccurate.
The national average annual rate increases for male teens, according to insuranceQuotes.com:
• 16 years: 109.65 percent
• 17 years: 99.12 percent
• 18 years: 90.45 percent
• 19 years old: 69.08 percent
The rate increases for women are much lower than for their male counterparts:
• 16 years: 81.63 percent
• 17 years: 72.69 percent
• 18 years: 64.81 percent
• 19 years old: 47.58 percent
Here is an interesting study that provides information on when teen drivers are most likely to be involved in an accident:
https://www.forbes.com/sites/tanyamohn/2011/10/18/teenage-drivers-a-new-study-provides-fresh-insights/#7b739d7569df
I think the study is correct in that experience is key. In Nebraska, for example, you must log 50 hours with your parents or complete a certified driver’s education course. For other states that still issue licenses without any requirements, this would be an effective way to require that children have more experience before they are allowed to drive on their own. Especially without a burden of costs to the state.