It’s no secret that the price of gas is exorbitantly expensive right now. Although the cost per gallon is finally starting to decline, fuel is still far pricier than it was in past years. Outside of hanging up your car keys for good, how can you possibly keep from going broke? If you’re strapped for cash, follow these rules to make the most out of every last drop of gas. With these techniques, you could get up to 20 more miles per tank.Be an easy rider:Driving “gently” can help you conserve gas. If you accelerate quickly, brake suddenly and drive aggressively, you could decrease your fuel economy by up to 33%! This kind of forceful driving can add more than a dollar to each gallon when you fill up your tank.Look 30 seconds into the future:Pay close attention to the road. If you keep your eyes moving and continually scan the road ahead, you’ll know early on when you’ll need to brake. Some experts say you should constantly check the road that is 30 seconds ahead of your car. That’s about a block in the city or half a mile on the highway.This allows you to plan ahead so you won’t have to make sudden aggressive maneuvers at the last minute. For example, if you see a light turning red up ahead, go ahead and start easing off your accelerator so you won’t have to make an abrupt stop at the intersection. If you slow down for long enough, the light may be green by the time you reach it, which means you won’t have to brake at all.Give your engine a rest:Turn off your car whenever possible. Experts say that idling for just one minute uses up more gas than turning off and then restarting your car. So, if you’re waiting at the fast food drive through or the bank for even a minute or two, go ahead and turn off your car.Watch your speed:Driving slow may not be fun, but it can certainly save you some gas. Cars generally reach their optimum fuel efficiency between 45 and 60 miles per hour. Once you accelerate to over 60 mph, your engine has to burn much more fuel to keep the pace.Some studies have shown that every 5 mph increase you drive over 60 mph adds about 20 cents to your gas price tag—and that estimate is based on a $3.22 per gallon model, so it adds up to even more right now.Keep cruising:You can also conserve fuel by maintaining a steady speed. When used correctly, cruise control can boost fuel economy by up to 14% on the highway. This is because every tiny pressure change you make to your accelerator—even slight changes that aren’t registered by your speedometer—can burn up more gas.If you maintain a precise speed with cruise control, you’ll avoid these small accelerator movements and save more gas. However, cruise control won’t work if you’re sitting in bumper to bumper traffic. In heavy traffic, your constant braking and speed changes can burn up a lot of gas. If at all possible, take a route with less traffic so you can sustain a steady speed. Of course, traffic is pretty much unavoidable in many cities.Take the most direct route:We all know that shortest distance between any two points is a straight line. But did you know that driving in a straight line can actually save you gas? By taking the shortest and most fuel efficient route from point A to point B, you’ll burn up much less fuel. You should also drive as straight as possible on the road—if you constantly switch lanes on the highway, you’re wasting a lot of gas. When necessary, try to make smooth, gradual lane changes.Look out for hills:If you know you are approaching a hill in the road, build up your speed before you reach it. Try to maintain your speed as you ascend the hill by gradually accelerating. This will help you prevent full-throttle acceleration, which burns up excessive amounts of gas.Don’t lock out overdrive:The typical car with a four or five speed automatic transmission has overdrive as its highest gear. Overdrive allows the car to maintain steady highway speeds above 45 mph without making the engine work so hard. You should only lock out overdrive if you’re towing something and need extra torque or in other rare circumstances. However, if you want to save fuel on the highway, leave the overdrive button alone.Consolidate trips:Try to consolidate car trips whenever possible. For example, if you know you need to go to the grocery store and the post office, don’t split these up into two different trips. Take care of as many errands as possible in one run.Whenever possible, walk or ride your bike, especially if you’re traveling somewhere just a couple of miles from home. Not only will this keep you healthy and fit, but it will also help you save loads in gas money.
If you’ve recently gone somewhere on vacation and your car did not have a Global Positioning System (GPS), you probably wish it did. GPS systems have become increasingly popular as their prices have dropped. Navigationally challenged drivers who used to decipher hard-to-read maps can now rely on these small devices to help them reach their destinations. However, the popularity of GPS devices makes them particularly attractive to thieves. They are also susceptible to damage in car crashes, like any other item in a car. How will an auto insurance policy cover a stolen or damaged GPS?
Unfortunately, standard policies provide little or no coverage for a GPS. Many older policy editions explicitly state that they do not cover losses to any electronic equipment that receives or transmits data signals. A GPS would seem to fall within that description. More recent policy editions do cover electronic equipment, but only if it is permanently installed in the vehicle. These policies provide a small amount of insurance for electronic equipment; $1,000 coverage is typical.
It is possible to buy additional coverage for GPS devices. Any car owner with equipment worth more than $1,000 should speak with her insurance agent about buying a special policy form. It increases the coverage to a specific amount shown on the form. Typically, insurance companies will not offer more than $5,000 coverage.
If the policyholder has an older edition of the policy, she will need a different form to cover a GPS. This form covers sound reproducing equipment; audio, visual and data electronic equipment; and tapes, records and disks while in a vehicle. A GPS device falls within the data electronic equipment category. Coverage applies if the unit is permanently installed in the vehicle or if it is removable from a permanently installed housing unit, designed to be powered solely by the car’s electrical system, and in or upon the car at the time of the loss. The form provides coverage for devices in cars the policyholder owns and those she rents or borrows. As with the other form, she can buy coverage in amounts up to $5,000.
The additional premium for this coverage is normally small. A rate of $4 for every $100 of coverage is typical. For example, the cost for $2,500 of coverage might be around $100.
As car buyers ask carmakers to add more and more gadgets to cars, insurance coverage for those gadgets will continue to evolve. It is unwise to assume that an insurance policy automatically provides much coverage for these gadgets. All insurance buyers should carefully review their policies and ask their agents questions if GPS coverage is a concern. With a GPS and the right insurance coverage, a driver can be confident that she’s going in the right direction.
Roy is a retiree who owns two cars – one that he drives during the winter, the other for the warmer months. He keeps license plates on only one car at a time. When the time comes to take one off the road and put the other one on, he visits his local motor vehicle bureau’s office, fills out a form and transfers the license plates. Last spring, he phoned his car insurance agent on a Tuesday and informed the service representative that he would be switching the plates that Friday. He asked her to remove coverage from the old vehicle and add coverage to the new one, with the changes to take effect on Friday. The service rep ordered the policy change as he requested.
On Friday morning as Roy drove to the motor vehicle bureau, he changed lanes without checking his blind spot. His car struck a vehicle in the right lane, damaging it and his car. He notified his insurance agent at once, the agent notified his insurance company, and the company promptly told him that he had no coverage. Roy, already not in the best of moods, demanded an explanation.
Why did Roy not have the insurance coverage he expected? The answer lies in the instructions he gave his insurance agent. The standard practice in the insurance industry is for coverage to both begin and cease at 12:01 AM on the effective date. For example, an auto insurance policy that takes effect on January 1, 2009 will state on its information page that coverage will begin at 12:01 AM on January 1, 2009 and end at the same time on January 1, 2010. Further, when an insurance company sends a formal notice to a customer that it is canceling his policy, the notice always states that the policy will cancel at 12:01 AM on the specified date. The purpose of this is to set clearly defined moments when coverage begins and ends. By setting the time at 12:01, there can be no doubt as to the date when that moment occurs.
When Roy asked his agent to remove coverage from the first car on Friday, his insurance on that vehicle ended at 12:01 AM Friday. Unfortunately, he was still using it; his accident occurred several hours later. Unbeknownst to him, he was driving an uninsured vehicle at his own request.
This problem is not limited to auto insurance. Suppose John and Mary Smith are selling a house and buying another one. Closings on both sales are scheduled for June 15. If John and Mary cancel the homeowner’s insurance policy covering the first house effective June 15, they are without coverage on it after 12:01 AM, even though they have not yet closed on the sale. If a window were to break in the early morning hours and allow rain to enter the house and damage carpeting, John and Mary have no insurance to pay for the new carpeting their buyers will expect.
Anyone selling a house or a car or taking a car off the road should ask the insurance company to remove coverage the day after the sale. He needs coverage on the property while he has ownership, even if it is only for a fraction of the day. If he has any doubts about the right time to remove coverage, he should discuss it with his insurance agent. While he may end up paying for insurance that he doesn’t need for a few hours after he sells the property, it is a small price to pay for avoiding an uninsured loss.
With the soaring cost of gasoline, many people are seeking more economical ways of getting around. Increasingly, people are car-pooling or taking the bus. Many city dwellers rely solely on mass transit and taxis to get around; they rent cars whenever they need to take longer trips. In at least 20 American cities, car-sharing clubs have sprung up. These clubs own vehicles that are available for hourly rentals to club members. The idea is to give people who occasionally need a car access to one without the cost and inconvenience of ownership.
In all of these circumstances, people retain the option of driving when the need arises. This is not a problem if nothing goes wrong. However, what happens if someone has an accident while using a car-sharing club vehicle? Who will pay for the resulting injuries or damage? The driver will likely assume that the vehicle’s owner has insurance to pay for any damages, and that may be true. However, there are some good reasons not to rely on the club’s insurance:
- The club may fail to pay the premium on its policy, causing the insurance company to cancel it.
- The club may fail to inform the insurance company that it has purchased the vehicle the member is driving. There is no guarantee that the club’s policy automatically covers newly acquired autos.
- The club may fail to comply with a policy condition, giving the insurance company justification for denying the claim.
- The club’s policy may exclude coverage for that particular loss.
- The club’s insurance limits may not be high enough to fully cover the loss.
In truth, the driver of one of these vehicles has no control over the amount and terms of the club’s insurance, nor can he control the club’s actions in the event of a claim. These same issues will apply if he rents a car or borrows one from a friend. What is the occasional driver to do? Strange as it may sound, he should consider buying an auto insurance policy.
Insurance companies can offer auto insurance with a special policy change titled Named Non-Owner Coverage. This policy provides coverage for specifically named individuals when they use vehicles not ordinarily available to them. A standard policy written for a car owner already has this coverage, but a policy for someone who doesn’t own a car must include the special form. The policy covers the driver for:
- His liability for injuries or damage to others,
- Medical payments for relatively minor injuries he suffers while using the car, and
- Major injuries he suffers in accidents with uninsured or underinsured motorists.
Coverage requirements may vary from one state to another, so it is advisable to check with an insurance agent about the coverage in your state. Should the policyholder buy a vehicle, the policy insures the vehicle for these coverages automatically for 14 days.
It is important to understand that the liability insurance this policy provides will pay only after the vehicle owner’s liability insurance is used up. It also does not insure other family members unless it specifically lists their names. Finally, it does not insure the vehicle for collision or other causes of physical damage. An insurance agent can explain options for insuring these types of losses. Because of these coverage limitations, however, the cost of the policy may be relatively inexpensive.
Operating a motor vehicle is always risky, whether the driver owns, rents or borrows the car. Car accidents can be financially devastating. All who plan to drive at some point should make sure they have proper and adequate insurance backing them up.
Parents of teens and young adults know the pattern all too well. A child hits the magic age when he can finally get a learner’s permit to drive. After multiple tries, he passes the driving test and gets his license. Mom and Dad open their wallets and tell the insurance company about the new driver. Their insurance policy covers him during high school, while he’s in college, and while he’s back home. At some point, however, he moves out on his own for good. Maybe he moves to a city with convenient mass transit, and his job doesn’t pay well enough for him to buy a car, so he goes without.
One day, he asks out that girl in the accounting department he’s been flirting with for a month. Meeting her at a subway stop just won’t do, so he grovels at the feet of the best friend with a new set of wheels. The friend, though appalled at the shameless pleading, agrees to lend him the car. Young Romeo picks up his date, pulls out into traffic, and rear-ends a Lexus at the first red light. Flustered, he pops it in reverse and backs hard into the BMW behind him. Two questions immediately come to his mind: 1) Will she still want to go to the movie? and 2) Does he have insurance coverage for this little adventure?
Bad news for Romeo: His date takes a cab home and his friend sort of forgot to pay his car insurance bill; the insurance company cancelled the policy. Then he gets an idea: It hasn’t been all that long since he lived with Mom and Dad. Maybe their insurance will pay for the repairs.
Every insurance policy has specific descriptions of who the insurance company will cover. The standard Personal Auto Policy published by the Insurance Services Office says that the person whose name is on the policy and any “family members” have coverage for the ownership, maintenance or use of any auto. Maybe Romeo’s in luck.
Maybe not. The policy also has a specific definition of the term, “family member:” A person related to the person named on the policy. The family member must be related by blood, marriage or adoption and must also be a resident of the other person’s household. Romeo has moved out of his parents’ home, which is why he got the job, met the girl, borrowed the car and had the double dent-fest. Is he still a resident of his parents’ household?
Chances are, the insurance company will decide he’s not, and it may have the law on its side. A California court ruled in 1975 that an adult son who lived in a separate apartment on his parents’ street and who relied on his parents for financial support was not a resident of the parents’ household and not entitled to coverage under their auto insurance.
Circumstances may change the answer. Courts have recognized that college students, though they live elsewhere the majority of the year, are still residents of their parents’ household. A self-supporting child who lives in her old bedroom and pays rent to her parents also qualifies as a resident.
It’s when the move away from home looks permanent that the break in coverage may occur. Even if she doesn’t own a car, she should consider buying an auto insurance policy with a special coverage called Named Non-Owner Coverage. This will cover her liability for injuries or damage she may cause while renting or borrowing a car. Coverage will apply after other available insurance (such as the car owner’s coverage) is used up.
And, while it wouldn’t have salvaged Romeo’s date, it would have saved him a whole lot of money.
If you have a need for speed and buy a small, sporty car that can burn up the road, you’ll likely face higher insurance premiums. Research shows that small cars are more accident-prone because owners of sporty models drive their cars in ways that make them more vulnerable to crashes. The other reason is that younger drivers who love taking risks typically buy them because they are affordably priced.
Every year, the Insurance Institute for Highway Safety examines statistics concerning the insurance losses associated with the most popular vehicles. Since insurance companies use similar yardsticks to set premiums, knowing what a car will cost to insure prior to purchase may save you from making a costly mistake. This year, the Institute rated the Subaru Impreza WRX, the Hyundai Tiburon, the Mitsubishi Lancer, and the Scion tC among the top 5 most expensive cars to insure.
Surprisingly, the car that heads the Institute’s list, the Cadillac Escalade, is a luxury SUV usually driven by a more affluent and older driver. So what makes this vehicle so expensive to insure? Car thieves love it. The car has developed a cult status because of its association with pop culture icons, making it so desirable among thieves, that comprehensive coverage of this vehicle costs six times the national average.
Of course, when you talk about the most expensive cars to insure, you eventually get around to a discussion of the least costly to cover. If you’re looking to cut your insurance bill, look for the current version of what used to be known as “the family car.” Cars in that class are usually large sedans, mid-size SUVs, and minivans. Those who drive these “family cars” have a reputation for cherishing safety. These cars are also rarely found in the commute and, therefore, avoid the risks associated with rush hour. Some of the cars considered the least expensive to insure include the Buick Rendezvous, the Subaru Outback, the Honda Pilot, and the Chrysler Town & Country. The Ford Taurus, a medium-sized sedan, tops this list. Insurers favor Taurus drivers because they prize safety above everything else. Cars like the Taurus are tucked away in garages when not in use, lessening their risk of being stolen. In addition, car thieves typically do not seek out these kinds of cars, increasing their value to insurers.
Before you buy your next car, consider the following tips:
- Ask your insurance agent if any of the models you are considering have premiums that are substantially different.
- Find out if any of the models have high repair costs or theft rates.
- Avoid more expensive cars because they usually come with a higher insurance bill.
- Shop safety. Look at crash tests results, rollover ratings, recalls, service bulletins, and consumer complaints.
If you were a car thief, which car would appeal to you? A shiny, new Cadillac with a navigation system, alloy wheels, and DVD player or a 13-year-old junker with peeling paint, a stick shift transmission and 200,000 miles on the odometer? You’d probably pick the Cadillac, but a legitimate car thief wants the junker. At least that’s the word from the National Insurance Crime Bureau’s “Hot Wheels 2008” auto theft report which ranks the most stolen vehicles in 2007. Leading the list for the fourth year in a row is the 1995 Honda Civic, followed by the 1991 Honda Accord.
What may seem like to junk to you is considered gold to car thieves. Although your junker may not be worth much as a whole, its individual parts — engine, transmission, sound system, airbags, etc. — when sold individually are worth a lot on the street.
For 2007, the most stolen vehicles in the nation were:
1. 1995 Honda Civic
2. 1991 Honda Accord
3. 1989 Toyota Camry
4. 1997 Ford F-150 Series Pickup
5. 1994 Chevrolet C/K 1500 Pickup
6. 1994 Acura Integra
7. 2004 Dodge Ram Pickup
8. 1994 Nissan Sentra
9. 1988 Toyota Pickup
10. 2007 Toyota Corolla
To protect their investment, vehicle owners are urged to follow NICB’s “layered approach” to auto theft prevention by employing simple, low-cost suggestions to make their vehicles less attractive to thieves. Following are NICB’s four layers of protection:
- Common sense — The cheapest form of defense is to simply employ the anti-theft devices that are standard on all vehicles — locks. Lock your car and take your keys.
- Warning device — Having and using a visible or audible warning device is another way to ensure that your car remains where you left it.
- Immobilizing device — “Kill” switches, fuel cut-offs, and smart keys are among the devices which are high and low tech, but extremely effective. Generally speaking, if your car won’t start, it won’t get stolen.
Tracking device — Some systems use GPS devices to track your vehicle. Others use radio frequency technology, which helps law enforcement track and recover it quickly.
From glittering bracelets and watches to sparkling rings and necklaces, jewelry can be found in almost every home. Unfortunately, these trinkets and charms are not always properly protected. If you own expensive or extremely valuable jewelry, it’s important to make sure you have the appropriate insurance.
Understanding the “sublimit”
You may assume your valuable jewelry is fully covered by your homeowner’s insurance. While most policies do cover jewelry, the payout is oftentimes much lower than the actual value of your bling.
Why wouldn’t your insurance pay the full value of your jewelry if it’s stolen from your home? It all comes down to what’s called the “sublimit”—this is the limit on the amount the insurance company will pay for specific types of personal property. Although your policy’s total personal property limit may be $75,000, the sublimit for jewelry may be as low as $1,500.
Read the fine print in your contract and find your policy’s sublimit for jewelry. If your jewels are worth more than the sublimit, you may want to purchase additional insurance.
Five steps to jewelry protection
If you decide to purchase additional insurance to fully protect your jewelry, follow these five simple steps:
- Get it appraised: If your jewelry has not been appraised within the last three years, take it to a jeweler for an appraisal. Be sure to choose a trustworthy jeweler who is a graduate of the Gemological Institute of America (GIA). (Most insurance companies require that higher-end jewelry is appraised by a graduate of the GIA.) Look for the designations G.G., G.J. or A.J.P. at the end of the jeweler’s name to ensure they are well-educated and reputable.
- Look for the four C’s: If you are getting a diamond appraised, the appraisal should include a description of the four C’s: carat, cut, clarity and color. These four details allow the jeweler to make an accurate appraisal, which will be very important should you ever need to file a claim with your insurer.
- Consider inland marine coverage: You can either purchase this type of insurance coverage as a separate policy or you can have it added onto your homeowner’s policy as supplemental jewelry coverage. Inland marine coverage offers much more coverage for jewelry than just your homeowner’s policy alone.
- Keep jewelry locked away: Be sure to keep your valuable jewelry protected in a lock box at home. If you own jewelry that you rarely wear (such as family heirlooms), you may consider locking it up in a safety deposit box.
- Review coverage regularly: Look over your jewelry coverage at least once every two years to make sure it is up to date. Also, if you sell any jewelry or purchase new high-value pieces, it’s important to update your policy as soon as possible.
Whether your jewelry box is spilling over with brand new jewels or you own one or two family heirlooms that are absolutely irreplaceable, it’s important to protect these valuables. To learn more about jewelry coverage options, talk with your insurance agent.
Once upon a time, large desktop computers were the golden standard of computing and portable devices were the exception. Today, almost the complete reverse is true. Laptop computers have grown more powerful and less expensive. Where college students considered typewriters to be mandatory equipment a generation ago, most today would not dream of attending college without a laptop. Businesspeople employ a variety of devices, including laptops, PDAs, Blackberries, and smart phones. Electronic book readers, led by the success of the Amazon Kindle, are becoming more popular. These devices are convenient, easy to carry, easy to use for information, entertainment, and communication, and very trendy. They are, however, also very susceptible to theft or damage, and their replacement costs can be substantial.
Any machine that runs on computer circuitry is vulnerable to certain perils. Most people who have owned such devices are familiar with the instinctually sick feeling they get when they accidentally drop one of these devices. Circuit boards are delicate components, subject to cracking if handled roughly. Moisture is also no friend to computerized gadgets. Drop one in water or spill a drink on it, and you will find yourself shopping for a replacement. Power surges, which can happen when electricity recycles after an outage, can instantly ruin a computer or electronic device. What’s more, popular electronic devices are perpetual targets for thieves.
When something happens to your laptop, will your homeowner’s insurance help pay for a new one? If you have a standard policy form, maybe not. The standard policy covers personal property of all types for a specific list of causes of loss. The list includes things like fire, lightning, explosion, windstorm and theft, but it does not list the other common causes of loss to computers. If someone steals a laptop from a dorm room, the policy will provide coverage. If the student drops it and cracks the screen, however, there is no coverage. However, additional coverage is available for purchase to protect against these common but disastrous events.
Anyone who owns computer devices should consider buying special computer coverage. This policy reverses common coverage for computers. Rather than listing those causes of loss the policy covers, it lists those that it does not cover. If a cause of loss is not on the list, the policy provides coverage. This expanded coverage applies to computer hardware, software, operating systems or networks, and other parts, equipment or systems designed solely for use with them. For example, in addition to covering laptop and desktop computers, it covers printers, scanners, modems, wireless routers, and similar devices.
The coverage does not pay for losses caused by things like temperature extremes, humidity, wear and tear, mechanical breakdown, corrosion, damage caused by household pets, and others. However, the four common causes of loss to computers (breakage from dropping, damage from spilled liquids, power surges, and theft) are not on the list. Therefore, the coverage pays for damage caused by all of these. For example, the policy will pay for repair or replacement of a scanner that someone steps on, but it will not pay for repairs to a laptop that simply fails to turn on one day.
Because computer equipment is so common now in households, homeowners and renters should discuss their coverage with an insurance agent. For a relatively small cost, homeowners, renters, and students can insure their increasingly important but delicate belongings against thefts and those accidents most likely to damage them.
Men and women alike often own expensive pieces of jewelry, such as diamond rings, designer wristwatches, bracelets, and necklaces. Not only are these pieces attractive to thieves, they are subject to several other perils as well. Because of the sentimental and monetary values associated with jewelry, proper insurance coverage is of great importance.
A standard homeowner’s insurance policy will pay for jewelry damaged by fire, smoke, vandalism, windstorm, and several other causes. Coverage is also available for stolen jewelry, but only for a maximum of $1,500 or $2,500. This limit applies collectively to all items of jewelry, furs and gemstones stolen at the same time; it does not apply separately to each item. It will not pay for pieces that are lost or that mysteriously disappear. In the event of a loss, the insurer will pay only the cost of replacing the item less depreciation.
Because of these limitations, people who own valuable pieces of jewelry should consider purchasing separate coverage, either as an add-on to their homeowner’s policy or as an individual policy. With this coverage, the policy lists specific items and the amounts of insurance on each. If the policyholder buys a new item during the policy period, the policy covers it automatically for 25 percent of the policy’s limit or $10,000, whichever is less. The automatic insurance ceases after 30 days; the owner must report the piece to the insurer to maintain coverage.
The policy covers items of jewelry but does not include unmounted gems; gold, silver and other precious metals; and silverware, flatware or goldware. The owner may be able to insure some of these items separately. The insurance will pay for loss from all causes other than war, nuclear disaster, actions of the government, and maintenance of the property. The owner must choose one of two options for determining the property’s value in the event of a loss. The first is the same as in the homeowner’s policy – actual cash value, which means the insurer will pay the least of:
- The item’s replacement cost minus depreciation;
- The cost of repairing it;
- The cost of replacing it; or
- The amount of insurance shown on the policy for the item.
The second is called “agreed value,” which means that the insurer will pay the full amount of insurance shown on the policy for the item if it’s lost or damaged. This option may cost more but provides more certainty for the owner.
Jewelry owners may also select optional coverages. One option gives the owner a premium credit for items stored in a bank vault. If the owner wants coverage to apply outside the bank vault, she must notify the insurer in advance and pay an additional premium. Another option gives a future spouse, whom the policy would not ordinarily cover, insurance for his or her interest in engagement or wedding rings. Under the third option, the insurer will pay the value of a complete set of items, such as a pair of earrings, even if the loss affected only one item in the set. The owner must surrender the surviving items in the set to the insurer.
Owners of expensive jewelry should consider having it appraised by a reputable jeweler at least every three years. They should also take common sense steps to safeguard it against theft, the most common cause of loss for jewelry. Finally, they should meet with their insurance agent for a coverage review every couple of years to ensure their insurance is adequately protecting them from loss to their valuables.
Standard homeowner’s insurance policies offer sound financial protection for most people. However, those who own large homes that would cost upwards of $500,000 to rebuild may have special coverage needs for which the standard policies were not designed. Such homeowners may own expensive jewelry or have costly business equipment at home, or they may be involved in public activities that make them targets for lawsuits. People with these exposures to financial loss may want to consider buying a high-value homeowner’s insurance policy.
Some of the additional coverages that insurance companies provide in high-value homeowner’s policies are:
Extended rebuilding cost. If a fire destroys the home and the policy limit does not cover the entire cost of rebuilding, this coverage will pay for the additional amount. Some policies pay as much as an extra 100 percent of the insurance on the home.
No requirement to replace or rebuild. A standard policy may not pay the entire replacement cost of damaged structures or contents unless the owner rebuilds or replaces them. High-value policies may waive this requirement and pay the replacement cost regardless of what the owner decides to do.
Demand surge coverage. After a major disaster like a hurricane, labor and materials for rebuilding are often in high demand. As a result, the cost of rebuilding a home jumps. This coverage provides additional amounts of insurance to pay for the increased costs.
Rebuilding to code. If building codes have changed and increased the costs of rebuilding the home, this coverage will pay for those costs above the amount of insurance on the home.
Deductible waiver. Some policies waive the deductible if the amount of a property loss exceeds a certain level, such as $50,000. However, the waiver might not apply to losses from certain causes such as earthquake or a windstorm.
Excess flood coverage. Most homeowner’s policies do not cover damage caused by flood waters. The National Flood Insurance Program offers this coverage, but the most insurance it offers is $250,000 on a home and $100,000 on contents. A high-value homeowner’s policy might provide as an option additional insurance that applies after the NFIP insurance is used up.
Backup of sewers and drains coverage. Standard homeowner’s policies do not insure against damage caused when a drain, such as a sump, backs up, though often the owner can buy this extra coverage. A high-value policy may include it automatically.
Electronic data. Some high-value policies may pay for the cost of restoring computer files and for costs resulting from theft of the policyholder’s identity.
Food. Unlike standard homeowner’s policies, a high-value policy may pay for refrigerated food that spoils when a covered cause of loss disrupts the power supply.
Lawsuits. Standard homeowner’s policies cover the costs of lawsuits and attorney fees only if they result from bodily injury or property damage the policyholder may have caused. High-value policies may go beyond that, covering alleged acts of libel and slander.
Higher amounts of coverage. High-value policies may cover some of the same things that standard policies cover, but for higher amounts. For example, these policies may provide more coverage for valuables, such as jewelry, furs and collectibles. They may provide more coverage for the expense of living elsewhere while the home is being repaired, more coverage for loss assessments from a homeowner’s association resulting from an accident, and more coverage for business property kept in the home.
Homeowners who think they may need this kind of additional coverage should consult an insurance agent. Many insurance companies are now offering high-value policies. It may well be worth a few minutes to review insurance needs and protect thousands of dollars worth of hard-earned property.
Many people collect paintings, sculptures, antiques, and other works of art with values ranging from garage sale prices to thousands of dollars. The International Risk Management Institute states that art becomes valuable for one of three reasons: cultural significance; owner’s subjective value; or the marketplace’s estimate of its worth. Regardless of the reason, damage to a valuable work of art will likely cause the owner significant financial loss.
A standard homeowner’s insurance policy provides some coverage for fine art, but is unsuitable for high-priced works. The insurance company will pay for losses to art caused by fire, water damage, vandalism, theft, and a limited number of other causes. In the event of a loss, the company will pay the item’s replacement cost after subtracting depreciation. For example, if fire destroyed a painting worth $1,000 on the open market, the homeowner’s policy would pay the cost of replacing the canvas, paint and frame after subtracting some amount to reflect the age of those materials. This amount may be nowhere close to the work’s market value.
For this reason, art owners may want to buy separate insurance on their fine arts. This insurance can be in the form of an addition (also called an endorsement) to the homeowner’s policy, or via a separate policy (sometimes called a “fine arts floater”). A fine arts floater insures paintings and drawings; art glass windows; valuable rugs, statues, furniture, and books; and “other bona fide works of rarity, historical value or artistic merit.” These items must be in a private collection owned by the policyholder; there is no coverage for works owned by a museum, business or government agency. The policy lists high-value art works individually on the policy with their associated coverage amounts and shows a combined insurance limit for all lower-value pieces. If the policyholder buys a new piece during the policy period, the policy provides automatic coverage for 90 days. The most it will pay for a new piece (until the owner reports it to the company) is 25 percent of the amount of insurance covering items specifically listed on the policy.
If the owner plans to transport an artwork from the address shown on the policy, coverage will apply only if competent packers handle the move. Coverage does not apply to a piece while it is in the custody of an art dealer, museum or auction house if the entity has insurance covering it. Also, the policy will not pay for damage to pieces while they’re on exhibition off the owner’s premises; the owner can extend coverage off-premises by adding the address of the exhibition to the policy.
The policy covers damage to fine arts from all causes except:
- Actions of governmental or civil authorities;
- Intentional damage;
- Repair, restoration, or retouching processes; and
- Breakage of glass, statues, and other fragile articles unless fire, explosion, collision, windstorm, earthquake, flood, malicious mischief, or theft caused the loss. For an additional premium, the company may remove this limitation.
In the event of a loss, the company will pay the amount shown on the policy for items specifically listed on the policy. For other pieces, it will pay amounts equal to their replacement cost minus depreciation, up to a maximum of $500 per item.
To accurately determine an item’s value, the insurance company may require an expert appraisal. It may also require the policyholder to take certain precautions to safeguard especially valuable pieces. A qualified insurance agent can give advice on appropriate coverage and companies. Anyone who owns these treasures should make certain the right insurance is in place.
Rushing to make it to work on time, Bill sees the traffic light up ahead turn yellow. He speeds up to make it through the intersection, but the light changes to red before he makes it to the other side. When he doesn’t see any flashing blue lights tailing him, Bill breathes a sigh of relief assuming he didn’t get caught—or so he thought.
A week later, Bill is shocked to receive a ticket for $150 in the mail. As he dashed through the red light a week before, a small camera at the traffic light snapped a picture of his car and license plate number. The Department of Transportation then tracked down Bill as the registered owner of the car and mailed the ticket to his home address.
As more cities install red light and speeding cameras, tickets by mail (like the one Bill received) are becoming increasingly common. Obviously, drivers are never thrilled to receive a speeding or traffic violation ticket for $100 or more in the mail. Some argue the cameras are an invasion of their privacy while others complain that local police departments are just looking for a quick and easy way to boost their budgets.
Despite these protests, traffic violation cameras aren’t going away any time soon. Such cameras are skyrocketing in popularity throughout the nation. From San Diego, California to Atlanta, Georgia to Scottsdale, Arizona, cities across the country are activating these red light/speeding cameras. Traffic camera fines range anywhere from $100 to $500 or more.
Cities with traffic cameras enjoy a phenomenal return on their investment. As a matter of fact, red light/speed cameras in Cleveland, Ohio caught more than 2,300 traffic violators within the first month of operation. Each Cleveland red light violator was charged $100 per citation while speeders were fined between $150 and $200.
Many drivers complain that these red light and speeding cameras can lead to unfair tickets. For example, let’s say you let your sister borrow your car. If a camera snaps her running a red light, the ticket will be mailed to you because you are the registered owner.
Some states, like Georgia, give drivers a chance to contest the ticket if the owner was not driving the car when the violation occurred. However, other states say the owner of the car is responsible for paying the ticket regardless of who was driving their car.
An uptick in accidents
Some research show that red light and speeding cameras may lead to more traffic accidents. A 2008 study by the University of South Florida’s College of Public Health revealed red light cameras significantly increase crashes. This could be because drivers are stopping abruptly at intersections when the light turns yellow in fear that they will receive a camera violation. With so many cars slamming on the brakes at intersections where cameras are present, many cities have seen a sharp rise in rear-end collisions.
Studies from North Carolina, Virginia, and Ontario have also reported cameras are linked with an increases in car crashes, including accidents involving injuries. A study by the Virginia Transportation Research Council also found that cameras were associated with higher crash costs.
However, while rear-end collisions have increased in some areas, studies show that more serious side-impact crashes have decreased due to fewer drivers running red lights.
Driving up insurance rates?
Many drivers worry that these camera tickets will lead to higher car insurance premiums. In most states, camera tickets are considered civil penalties, so they should not result in points on your driver’s license or have an impact on your insurance rates. However, if you rear-end a driver who slams on their brakes at a camera-monitored intersection, you probably will see a hike in your car insurance premiums.
Many people latch onto a certain color in preschool and remain ever-faithful to that shade throughout their lifetime. Whether it’s blue, pink or green, they may deck out their childhood bedroom in their favorite hue, refuse to wear any other shade in junior high and even dye their hair that color in high school. Later, when it comes time to buy their first car, these color-faithful people usually choose a vehicle in—what else—their beloved favorite color.
While this is no surprise, some research reveals that the color of your car actually speaks volumes about your outlook on life, your personality—and even your driving style. For example, a United Kingdom study shows that black cars were twice as likely to be involved in U.K. car accidents than cream-colored cars.
Here are a few more interesting findings from the same U.K. study:
- Black cars are usually driven by aggressive people who consider themselves “outsiders.”
- Silver cars are usually owned by cool, calm and slightly detached drivers.
- Green cars are often driven by people with “hysterical tendencies.”
- Yellow cars are typically chosen by idealists with upbeat, optimistic attitudes.
- Blue cars are usually driven by introspective people who are cautious drivers.
- Gray cars are usually chosen by calm, sober drivers who are dedicated to work.
- Red cars are driven by energetic people who are fast talkers, movers and thinkers.
- Pink cars are often chosen by gentle, loving people.
- White cars can signify status-seeking extroverts.
- Cream cars, the least likely to be involved in an accident, are generally driven by self-contained, reserved people.
Does color affect rates?
Based on this particular U.K. study, car color can reflect a driver’s personality—but can it affect their insurance rates? Many people seem to believe so.
According to a 2005 Chicago Sun-Times article, 25% of surveyed drivers said they believe the color of a person’s car does affect their auto insurance rates. After all, aren’t drivers of red cars typically risk-taking, speed-demons and drivers of black cars overly aggressive, road ragers? If that’s the case, wouldn’t drivers with those color cars be viewed as a higher risk to the insurance company and therefore be forced to pay higher rates?
The answer is no. Insurance companies do not take the color of your car into consideration when they calculate your premium. Your insurer probably has no idea what color car your drive unless you offer up that information.
Typically, insurance companies determine your rate based on some or all of the following factors:
· Your vehicle’s make, model, body type and engine size
· Your personal credit history
· Your driving record
· Your usage of the car (such as if you are using the car for work, pleasure or as a collectible.)
· How many drivers will be using the car and their ages
· How many vehicles you own
· What kind of coverage limits you want
· Where you live
· Your weekly, monthly or annual mileage
So, go ahead and buy your next car in your favorite hue to match your house, your clothes or even your hair. Although it may advertise your personality to the world, your car color will have no affect on your insurance rates.
When people buy homeowner’s insurance, they usually intend for it to cover the home in which they live. That is also the insurance company’s expectation, and most of the time, that is the case. However, sometimes circumstances change and the home is left empty. For example, the family goes on a weeklong vacation, or one that lasts a month or more. One member of the couple may accept a temporary job transfer that will last for a few years, and they may decide not to sell the home. In other cases, the family may move into a new home but find themselves unable to sell the prior one. In all of these cases, the home is rendered either unoccupied or vacant. This change in status can affect the insurance coverage.
The standard homeowner’s policy provides coverage for losses caused by vandalism and malicious mischief. For example, the policy will pay for the repair and replacement of windows if the family comes home and finds all of the first floor windows broken. A reasonable person could conclude that vandals broke the windows. However, the policy will not pay if the home has been vacant for more than 60 days. Insurance companies design the policies and set the prices under the assumption that a home will be occupied. A vacant building is vulnerable to damage by vandals, so the companies have designed other policies to cover them.
It is important to understand that a temporarily unoccupied home is not the same as a vacant one. A home is vacant if it has no occupants and contains no personal property (furniture, clothes, TVs, etc.) An unoccupied home still has personal property in it. The policy will pay for vandalism losses occurring to an unoccupied home. So, if a family moves out of a home and it sits empty while they try to sell it, vandalism coverage ceases on the 61st day of vacancy. If the family merely goes on vacation for three months, vandalism coverage remains in force.
The question of whether a loss is an act of vandalism can sometimes be in dispute. For example, a Utah claim went to court after the insurance company denied payment for a fire caused by arson, claiming that arson is an act of vandalism. The court agreed with the company, finding that arson is a form of vandalism and therefore the insurance did not cover the loss.
The standard policy specifically states that a home in the course of construction is not vacant, so the insurance should cover any associated vandalism losses. Also, since an insurance company does not consider a home with personal property to be vacant, coverage applies to any belongings damaged by vandals. However, an important coverage limitation applies to frozen water pipes. The policy will not cover damage caused by freezing of plumbing, air conditioning, heating and sprinkler devices. So, if the pipes freeze while the family is vacationing in Florida during the winter, the policy will not pay for the resulting water damage. This is not true if the homeowner has used reasonable care to maintain heat in the home or if he has shut off the water supply and drained the pipes.
It is always a good idea to consult with an insurance agent when a home’s circumstances change, whether it is for sale or just an extended period of unoccupancy. The owners should consider loss prevention or control techniques, such as security systems and motion-sensitive lights. The combination of loss prevention and insurance may not eliminate the chance of a vandalism loss, but it will provide some peace of mind to those who must leave their most valuable investment.
Every year, millions of people move – from one apartment to another, from an apartment to a home, or from one home to another. Moving is a stressful process, filled with dozens of logistical details and concerns. One set of concerns that many people never consider is whether and how their insurance will apply to their property and any motor vehicles they use during the move.
Many people choose to hire professional movers. Even in experienced hands, moving creates several risks to personal property, including:
- Property may break, disappear, or suffer collision damage while the movers load it onto their trucks, drive it to the new home, and unload it. If the homeowners must live in a temporary residence until their new home is available, the same risks will apply a second time.
- The owners may decide to leave some property at a storage facility because the temporary apartment is too small to contain a house’s worth of belongings. Stored property is vulnerable to damage, theft, or flooding, depending on the facility’s location.
- Property in the temporary residence may be damaged or stolen.
Standard moving contracts limit the movers’ liability for damage to property of others to a certain value per pound, such as 50 or 60 cents. For example, if the movers drop a 100-pound sofa while loading it onto a truck, the most the mover will pay for it is $60. Also, the contracts often absolve the movers from liability for property damaged by “acts of God,” such as flooding, lightning strikes, and hailstorms. While property owners can pay extra to upgrade the coverage, the upgrade normally values the property at its worth after depreciation, it may not cover breakage unless the movers packed the breakables, and it might not cover loss from certain causes such as flooding.
If the owners still have a standard homeowner’s insurance policy in force, it will cover loss to their property while the movers have it, while it is stored, and while it is at the temporary home. The owners have the option of buying coverage that will pay for replacing the property without depreciation, and they can purchase options that will cover the property for more causes of loss.
Many people, especially those purchasing a home for the first time, may rent trucks and move their property themselves. If they have a current homeowner’s or renter’s policy, it will provide the same coverage that the people moving from home to apartment to home have. If the owners have a personal auto insurance policy, it will automatically cover them for liability they may incur for injuries or damages they cause while using the rental trucks. However, it might not cover damage that occurs to the trucks. While some states require insurance policies to cover some rented vehicles, renters in other states may want to consider purchasing the rental company’s collision damage waiver.
Moves can encompass many different circumstances. A family may buy a home but rent it back to the sellers for a period of weeks or months. Empty nesters may sell their freestanding house and move into a condominium. Families may move across the country, shipping some property by truck while they drive or fly to the new region. Regardless, people on the move should consider the insurance implications and discuss them with an insurance agent. Certain types of property (collectibles, musical instruments, artwork) may need special coverage not found in a homeowner’s policy, and a current homeowner’s policy may not cover a newly purchased home that is being rented back to the sellers. The agent can provide valuable guidance on these questions. Moving is stressful, but having the right insurance can make it a little less so.
In the wake of Hurricane Katrina, no one could ignore the shocking media coverage documenting the devastating destruction. When the levees broke and storm waters surged, homes were swept away, families were left stranded on rooftops and many lost their lives. Suddenly, families throughout the nation were forced to ask themselves a frightening question: “What would happen if, in the blink of an eye, we lost everything to a rush of floodwaters?”
FEMA points that out that everyone needs flood insurance. Unfortunately, too many families assume that they don’t need flood insurance because the government will give them the financial support they need if they lose their home in a major flood. This is simply not the case.
The government only provides disaster assistance if the area where the flood occurs is officially deemed a disaster area. Even when the government does provide financial assistance to families in a disaster area, it’s not a payout—it’s a loan that must be paid back, interest included.
Read on for a few important facts everyone should know about floods and flood insurance.
Think you’ll probably never be affected by a flood? Think again. According to the National Flood Insurance Program (NFIP), floods are the #1 natural disaster in the U.S. Here are a few more enlightening flood statistics from the NFIP:
- Floods and flash floods occur in all 50 states.
- Everyone lives in a flood zone.
- 20 to 25% of all flood insurance claims are filed in low to moderate-risk areas.
- Just an inch of water can cause costly damage to your property.
- Your home has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9% chance of fire.
- Over the past 10 years (1999-2008), the average flood insurance claim paid in the US was more than $45,000.
- Over the past 10 years (1999-2008), the NFIP paid over $25.5 billion to flood insurance customers.
- The NFIP awarded over $2.6 billion in flood claims to-date in 2008.
Homeowner’s insurance doesn’t cover flood damage
Damage to your home resulting from a flood is not covered by homeowner’s insurance. Why not? Basically, it’s a way for insurance companies to protect themselves. In the 1960’s, a handful of waterfront communities, all covered by the same insurance companies, were slammed with major floods. The deluge of insurance claims resulted in cataclysmic losses for the insurance industry.
Consequently, in 1968, the federal government created the National Flood Insurance Program (NFIP), which is administered by FEMA. According to FEMA, the NFIP was formed to “reduce future flood damage through community floodplain management ordinances, and provide protection for property owners against potential losses through an insurance mechanism that requires a premium to be paid for the protection.”
It’s not available everywhere
Flood insurance is only available in communities where “the appropriate public body has adopted adequate floodplain management regulations for its flood-prone areas.” Unfortunately, communities are not required to follow proper floodplain management techniques. So, before you start shopping around for flood insurance, you’ll want to makes sure that your community is covered.
Coverage is delayed
If a major storm is about to hit your town and local meteorologists are predicting potential floods, you can’t run out and buy flood insurance and expect to be covered. Generally, your policy must be in place for 30 days before it takes effect.
Not all floods are created equal
Flood insurance only covers damage caused by waters rising from the ground. According to FEMA, the official definition of a flood is “a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property).” FEMA specifies that floods are caused by:
· Overflow of inland or tidal waters
· Unusual and rapid accumulation or runoff of surface waters from any source
· A mudflow
· The collapse or subsidence of land along the shore of a lake or another body of water, caused by erosion or undermining caused by waves or currents of water
If your home is damaged by a rush of water from broken pipes or a main break, FEMA says your flood insurance will not cover it unless “there is a general condition of flooding in the area and flood is the proximate cause of sewer or drain backup, sump pump discharge or overflow, or seepage of water.”
The price varies
The price tag on flood insurance varies, costing anywhere from $223 to $3,000 a year. The price you pay depends on where you live and what type of coverage you want.
Through the NFIP, $250,000 is the maximum amount of money you can receive to rebuild the structure of your home. However, private flood insurance companies can cover far beyond that amount—for a higher premium, of course. You’ll have to pay extra if you want to cover personal items within your home. Contents damaged by a flood are covered only up to $100,000. If you are renting a home, you can purchase flood insurance to cover your belongings for up to $100,000.
Auto insurance can be a large expense in a family’s budget, and it makes sense to look for ways to reduce the cost. In addition to shopping for a better deal, some car owners may look at all the coverages they’re paying for and wonder if they need them all. One coverage that often has a big price tag is collision coverage – the coverage that pays to repair or replace a vehicle that has collided with another car or object. If the owner still owes money on the car loan, the bank will require her to keep collision coverage. Once that loan is paid off, does is make sense to drop the coverage? The answer depends on several factors.
First, how much is the vehicle worth? Several resources are available to help answer this question. Check the classified ads in the newspaper to see what sellers are asking for vehicles of the same age and model. Publications like the N.A.D.A. Guide and Kelley Blue Book can suggest a starting point for determining value. Web sites like Edmunds.com offer calculators that take into account the vehicle’s mileage and condition.
How much does collision coverage cost? This information should be clearly stated on the insurance policy’s information page. Since many auto insurance policies run for terms of six months, the annual cost may be twice the amount shown on the policy. Compare the annual cost to the vehicle’s value. How many years of premium payments would equal the vehicle’s value? If the answer is a low number, dropping the coverage may make sense. Keep in mind two things: Collision premiums decrease as a vehicle ages, stabilizing when it’s several years old. Also, in the event of a total loss, the insurance will pay less than the vehicle’s value because the policy’s deductible will apply.
The amount of that deductible is also a consideration. This is the amount that the vehicle owner must pay out of pocket even when the insurance applies. If a collision destroys a car worth $3,000 and the policy features a $500 deductible, the most the insurance company will pay is $2,500. Therefore, an accurate estimate of the cost of collision coverage must include both the premium and the deductible. The premium decreases as the deductible increases, making the insurance more affordable and the loss less so.
Perhaps most important, the vehicle owner must determine what she can afford to pay out of pocket if a loss occurs. If she has a sizeable emergency fund in the bank, she may decide to skip the coverage and add the savings to the fund. If savings are skimpy and buying a replacement vehicle unexpectedly would present a financial hardship, keeping the coverage may be more prudent. Dropping the coverage also imposes other costs on the owner, such as time spent finding a replacement and negotiating its purchase, finding alternate transportation in the interim, and possibly renting a substitute.
Finally, dropping the coverage may mean the loss of associated coverages. For example, some companies offer rental reimbursement and towing and labor coverage only to customers who buy comprehensive and collision coverage. Some companies may also offer other benefits like “concierge” claim service to those customers. The vehicle owner must decide how important these are to her before she makes her decision.
Ultimately, each vehicle owner must decide how much financial risk she can bear on her own versus the certain cost of the insurance. An insurance agent can provide information on alternative deductibles and offer guidance. However, only the owner can decide whether the cost of the coverage is worth the potential benefit.
A recreational vehicle, such as a motor home, can be a significant investment. RV owners shop for their vehicles carefully before they plunk down tens of thousands of dollars. While finding the right RV and arranging financing are the first steps toward ownership, it is important to pay as much attention to the next step: securing the right insurance coverage for the new vehicle.
Some RV owners may be tempted to simply add coverage to their existing auto insurance policy. Many auto insurance companies will do this, but it might not make the most financial sense for the owner. For several reasons, a special RV insurance policy may better meet the owner’s needs. First, motor homes are larger and heavier than most passenger cars and trucks. In an accident, they are capable of causing injuries and damage much more severe than lighter vehicles. It might make sense for the owners to buy larger amounts of liability insurance for the RV than they have for a car. Liability insurance pays for the owner’s liability to others for injuries or damages. The amount of insurance covering a car may not be enough to properly cover an RV.
Also, insurance companies calculate auto insurance premiums based on several factors, including commuting distance. They assume that the car owner will use the vehicle frequently. These rates are inappropriate for RVs, which normally receive much less frequent use.
Standard auto insurance policies provide little or no coverage for personal belongings that suffer damage in a car accident. Often, homeowner’s insurance will cover these items, but the policies may limit the amounts of coverage or may carry deductibles of $500 to $1,000 or more. Insurance companies that specialize in RV insurance design policies to cover the items that customarily travel in a motor home, like clothes, tools, electronics, dishes and sporting goods.
The RV insurance policy may also do a better job of protecting against damage to the vehicle itself. Comprehensive and collision coverages in auto insurance policies pay the cost of repairing or replacing the vehicle after deducting an amount for depreciation. This can leave the RV owner with a large out-of-pocket cost if he has a balance outstanding on his loan and his vehicle is a total loss. Also, the depreciated payment amount will probably be too little to purchase a comparable replacement vehicle. An RV policy provides Agreed Value Coverage, which means that the insurance company and the owner agree in advance on the RV’s value and the company does not deduct anything for depreciation. The company will need a copy of the RV’s bill of sale or a professional appraisal before it agrees to a value.
RV policies also often provide unlimited coverage for towing and roadside assistance, whereas auto policies may limit this coverage to a small amount. The RV policy may also provide Emergency Expense Coverage to pay for transportation and lodging if an accident disables the vehicle. RV policies may feature “disappearing deductibles,” where the deductibles decrease for every year that the owner is claim-free. Discounts often apply for safe driving, passing driving safety courses and vehicle safety features.
Current and prospective RV owners should seek out insurance agents who have expertise in insuring these vehicles. These agents will have good working relationships with the companies that provide the insurance and will be strong advocates at claim time. They will also be able to explain the different coverage and price options available and recommend financially solid companies. With the right insurance, RV owners can relax and enjoy a mobile lifestyle.
Late for an early morning business meeting, you grab a cup a coffee and rush out the door—only to discover your car’s windshield has been smashed to bits. Your heart immediately plummets and your hands begin to shake with anger. Now what? Although you may be tempted to burst into tears or launch into a fit of rage, it’s important to take a few deep breaths and focus.
Fortunately, if you have comprehensive coverage, your auto insurance should cover the damage to your car. However, to ensure you receive the money you need for repairs, you will need to follow a few specific steps:
Notify the police
If your car has been vandalized, you should contact the police within 24 hours of the vandalism. It’s important to file a police report so that you have an official record of the incident. This record will help your auto insurance company resolve your claim.
Call your insurance company
You should also contact your auto insurance company to file a claim. Don’t delay—most insurance companies say you must file your claim as soon as possible in order to receive benefits.
Your insurance company may request a police report, personal statements and other documentation. Additionally, if any items that are protected under comprehensive coverage were stolen from your car (such as an aftermarket car stereo), they may ask for receipts for these items. Try to provide your insurance company with as much documentation as possible because this will help them resolve your claim more quickly.
Prevent further damage
Some insurance policies require you to take measures to protect your car from additional damage after vandalism. For example, if your window has been broken, you will need to cover it with plastic or another protective material as soon possible. This will ensure that the interior of your car is not further damaged by rain, snow, wind or other elements. Your insurance company may reimburse you for the materials you buy to protect your car, as long as the expenses are within reason.
If you knowingly leave a broken car window uncovered, and your car interior or electrical systems are damaged by weather, your insurance company will not cover this damage. This is why it’s so important to take measures to protect your car as quickly as possible.
Generally, once the police have taken any evidence they may need from your car and say you can move your vehicle, you should immediately take steps to protect your car from further damage. You do not need to wait for your claims adjuster to assess the damage before taking these steps.
Let your insurance company resolve the claim
Once your insurance company assesses the damage to your car, they will tell you whether or not the damage will be covered. If it is covered, they will give you a few options for repairing your car to its pre-vandalism condition. If your window was broken and your dashboard was damaged, they will be repaired. If your car stereo was stolen, the insurance company will give you a new one comparable to the one you had.
If you have any questions or concerns about your claim, do not hesitate to contact your insurance company. They understand having your car vandalized is an invasion of privacy, and they want to help you through this difficult time.
Auto and homeowner’s insurers all look at your credit score as part of their criteria for deciding how much you should pay for coverage. Yet, blemished credit doesn’t necessarily translate into higher insurance premium rates. Instead, it is the overall insurance risk score that can cause a rise in your rates.
Insurance risk scores are similar to the credit risk scores used by lenders to determine whether or not to approve a loan or line of credit because both look at your credit information. However, the two are not the same thing. Both insurance scores and credit scores look at the same five characteristics of a person’s credit report, although the data are weighted differently:
- past payment history;
- amount of credit owed;
- length of time credit has been established;
- new credit; and
- types of credit established.
The biggest difference is that insurance risk scores are determined by looking at stability and credit risk scores are determined by looking at a reliable pattern. Insurance risk scores focus more on how regularly you pay than on how much you pay and how much you owe.
The insurance risk score is used by insurers to assist in identifying consumers who are consistent and reliable, as well as those who show a pattern of demonstrating common sense with money. Obviously, it is commonly thought that such people are less likely to file a claim on an insurance policy, thus, they are likely to cost the insurer less money.
Following is the information many insurance companies use to formulate a risk score and how each is weighed:
- Past payment history (approximately 35%)
A past payment history is determined by: how you’ve paid your credit bills in the past; if your bills have been paid on time; items in collection status; the number of adverse public records (bankruptcy, wage attachments, liens); and the number and length of delinquencies or items in collection.
- Credit owed (approximately 30%)
Credit owed is how many accounts, what kind of accounts, and how close you are to your credit limits.
- Length of time credit has been established (approximately 15%)
Length of time credit established is how long you have had your credit accounts and how long you have had other specific accounts.
- New credit (approximately 10%)
New credit is the number and proportion of recently opened accounts versus already established accounts; the number of credit inquiries; and the reestablishment of credit history after payment problems.
- Types of credit established (approximately 10%)
Types of credit established is the various types of credit accounts including credit cards, retail store accounts, installment loans and mortgages.
In summary, insurers rely on factors that show long-term stability. So, by demonstrating responsible use of credit and keeping your balances low, you should be able to improve you insurance risk score. A lower insurance risk score could translate into lower insurance premiums if you’ve been impacted by a negative credit history in the past.
If you wanted to, you could build a panic room for protection from robbers or kidnappers. But what about protecting your belongings when you’re not home? Perhaps you really don’t want to install an alarm system—or maybe you do. Either way, here are some no-cost and low-cost tricks to make your protection more complete, and help keep your belongings away from thieves.
Begin with the landscaping, which is the first thing a burglar sees and the first thing he will assess. To make it harder for a burglar to hide and gain entry:
· Prune lower limbs from any big trees.
· Trim bushes so a man could not use one for cover.
· Move any decorative trellises away from windows or porch roofs so they cannot be climbed for second-floor access.
· Consider planting thorny bushes below first-floor windows, and be sure they are close enough to the house so that an adult could not wedge behind one to jimmy a window without getting scratched up.
· Remove any trees or bushes beside exterior doors. They can hide a burglar from passing cars and they can also hide intruders from your sight when you answer the door.
· Make sure all ladders and tools are secure inside the house, not inside a garden shed.
· If your yard is dim at night, install the brightest, biggest lights you can afford for all entries to your house. Use them. Turn them on when you leave the house at night; set up motion detectors to turn them on when you are away.
Inside the Home
Windows generally provide easier access for criminals than doors. Here are some window tactics:
· Buy special window locks at your hardware store for all first-floor windows and any second-floor windows accessible from a porch or garage roof. DO NOT hang the keys on clever little hooks or nails beside the window. Crooks know that one and will simply break a pane and reach around until they find the key. (But be sure the whole family knows where the keys are in case of emergency.)
· Don’t demonstrate the easiest window to enter by climbing in it. If a family member regularly forgets his or her key, consider leaving keys with a trustworthy neighbor for emergency use. DON’T CLIMB IN THE WINDOW EVER. Even amateur burglars can figure that one out, especially if they’ve seen you do it and figure the neighbors won’t notice.
· For sliding windows, use the same techniques as for sliding doors, below.
Some burglars like to enter like a guest, through the door. Here are some ways to discourage that sort of burglar:
· Make every entry door solid core wood or metal; hollow-core doors are easily kicked in. The door should fit the frame snugly, with no more than 1/8 inch between door and jamb. If the gap is larger, replace the door, or install a heavy-gauge metal strip available at the hardware store.
· Replace doors with decorative glass windows or panels. If that’s too expensive, install break-resistant plastic panes, or install a decorative grille over the glass.
· It’s unlikely, but if an entry door has hinges on the outside, rehang it with hinges inside. If that’s impossible, reinstall it with pinless hinges. Burglars can pop pins and take off the door to enter.
· Make sure locks on all sliding glass doors are sturdy. Then use a solid stick of wood or broom handle in the track of the closed door.
· Adjust door rollers so the door cannot be lifted out of its track.
A Few More Hints
· Close your garage door when you’re away, whether or not it also leads into the house. An empty garage equals “no one’s home.” Cover garage windows completely with shades or curtains so no one will know if there’s a car in there or not.
· Don’t leave notes on entries; if you were home, you wouldn’t leave a note. Not even for FedEx.
· Don’t hide keys in the yard; burglars know all the usual places, even those cute little garden toads with hollow bellies.
In the midst of a full-blown recession, our country is likely to see an increase in at least one area: crime. As the rate of unemployment sky-rockets and law enforcement budget cuts sweep the nation, experts say a spike in crime (particularly property crimes) is imminent.
The shocking statistics
Although the latest FBI statistics show that violent crime fell 3.5% and property crimes dropped by 2.5% in the first six months of 2008, the agency’s final 2008 statistics are not available yet. However, based on historical evidence, experts predict that a swell in crime is in the cards—and it may already be occurring.
As a matter of fact, 43% of police departments reported rising levels of “recession-related crimes,” according to a recent Police Executive Research Forum survey of 233 police departments. Of those surveyed, 40% of departments said thefts had increased in recent months, 39% said robberies had risen and 32% reported a boost in burglaries.
Sociologists and other crime experts say this uptick in crime is not surprising. History shows that crime rates generally peak during or immediately after a recession. In fact, the U.S. underwent an increase in crime during each of our last five recessions.
Experts point out that police department budget cuts will only magnify the problem. Due to declining sales and property taxes, law enforcement agencies throughout the nation are being forced to activate hiring freezes, postpone buying equipment and even lay off officers.
Protect your vehicle
In the heat of rising property crime rates, experts are strongly encouraging people to take extra care to protect their homes and cars. Here are a few ways to decrease your risk of becoming a car theft victim or at least minimize the financial impact:
· Install a car alarm.
· Always roll up your car windows and lock the doors.
· Never leave valuables in plain view in your car. Lock shopping bags in the trunk and place any electronics, including portable GPS systems and iPods, in the glove compartment.
· Never park in a secluded area. Find a crowded, well-lit area and try to park near vehicles that are similar in size to your car. If you park a small car between two large trucks or SUV’s, it’s an easy target—thieves can hide behind the cover of the larger vehicles while they break into your car.
· Remove your garage door opener from the car. Some thieves will steal garage door openers and look for mail or other documents in the car with your address on it. Then, they’ll rob your house when you’re away.
· Make copies of all the documents you need to keep in your car, including insurance ID cards and registration documents. Black out your home address on the copies. Keep the originals at home or in a safety deposit box, and put the copies without your address in your car. (This ensures that thieves can’t find out where you live.)
· Carefully review your auto and homeowner’s insurance policies. Items stolen from a car that are not actually part of the vehicle typically are not covered by auto insurance policies. Therefore, you may have to claim thefts of portable electronics, jewelry and other items stolen from your car under your homeowner’s policy. You should also look at your current coverage amount and determine if you need to increase your maximum limits to cover your personal items.
· Consider purchasing a personal article insurance policy for expensive items like engagement rings, fur coats or other valuables. These polices often include worldwide coverage and no deductibles.
Suffering major damage to a home is a traumatic event for any family. The experience brings shock, worry about family members and pets, grief at the loss of treasured possessions, and stress about the overwhelming task of replacing it all. Right on the heels of these emotions comes a more immediate question: Where will the family live now, and how will they pay for it? Fortunately, standard homeowner’s policies provide coverage for loss of use of a home.
The standard policy contains three Loss of Use coverages: Additional Living Expense, Fair Rental Value, and Civil Authority Prohibits Use. Additional Living Expense coverage pays for the homeowner’s necessary increase in living expenses when the home, damaged by a covered cause of loss, becomes unfit to live in. For example, assume that a severe windstorm knocks a tree into a home’s upstairs. It wrecks three bedrooms and two bathrooms, causing pipes to break and damaging electrical wiring. Since the policy covers windstorm damage and the home is unsafe for the family to occupy, this coverage will pay the extra amount the family must spend to live elsewhere for a period of time. However, the insurance company will pay only the amount necessary for the family to maintain its normal standard of living. If the family was not living in a luxury condo before the loss, the company will not pay for them to live in one after. The company will pay for the shortest period of time necessary to repair or replace the damaged property or to permanently relocate.
It is important to note that the insurance pays only for the increase in costs, less any costs that decrease. If the family had a mortgage payment of $1,000 per month, the rent for a temporary home is $1,200, and utility costs are $50 less, the insurance will pay $150 per month.
Fair Rental Value coverage applies to homeowners who rent out part or all of the premises. Should a covered cause of loss damage the home and make it uninhabitable, the insurance will pay the rental value that the homeowner loses. Coverage lasts only for the shortest time necessary to repair or replace the premises, and the company will reduce the payments by the amounts of non-continuing expenses. For example, if the rental value was $1,000 per month but the cost of heat, electricity and water was $400, and all of these services ceased during the repair period, the insurance will pay the $600 difference.
Recently, an airliner crashed into a neighborhood near Buffalo, New York. In addition to the tragic loss of lives, the crash destroyed one home while barely affecting the others on the street. However, law enforcement authorities required occupants of surrounding homes to evacuate for several days while recovery crews cleaned up the site. These families probably benefited from Civil Authority Prohibits Use coverage. This insurance pays for the increased cost of living elsewhere for up to two weeks when civil authorities prohibit the homeowner from using her residence because of direct damage to neighboring premises caused by a covered peril. Once again, the company will pay only the amount above non-continuing expenses and only the cost of maintaining the family’s normal living standard.
The amount of insurance that applies to these coverages is normally some percentage (typically 30 percent) of the amount covering the home. For example, a policy covering a home for $200,000 would provide $60,000 coverage for the loss of use coverages combined. A professional insurance agent can answer questions about them. Plan ahead; it is always much better to find out how much coverage you have before the worst happens.
You’re cruising down the highway when you suddenly see flashing red lights on the shoulder up ahead. What do you do? Stop your car? Speed up and drive quickly past the scene? Crane your neck as you drive past to get a better look? Or ignore the lights altogether and go along your merry way?
None of the above. When you see a police car, ambulance or roadside assistance vehicle on the side of the road with its lights flashing, you should MOVE OVER.
Every year, thousands of U.S. law enforcement officers and emergency responders are killed or injured on our nation’s highways. According to the National Law Enforcement Officers Memorial Fund, more than 150 U.S. law enforcement officers have been killed since 1997 after being struck by vehicles along our nation’s highways. In response to this tragic trend, most U.S. states have enacted laws to help ensure the safety of law enforcement officers and emergency responders.
Move Over Laws 101
These laws, fittingly named “Move Over” laws, require motorists to move away from emergency vehicles stopped on the side of the road with their lights flashing.
As of March 2009, 43 states had passed Move Over laws. However, only 29 states offer protection for drivers of tow trucks and other recovery vehicles.
Although Move Over laws vary slightly from state to state, the basic details are pretty much the same. Generally, motorists are required to change lanes when possible to give safe clearance to law enforcement officers and emergency responders on the roadside. If motorists are unable to change lanes, they are required to slow down to at least 20 mph below the speed limit.
A little-known law
Unfortunately, most motorists are still unaware of these laws. Just 29 percent of Americans have heard of Move Over laws, according to a national poll by Mason Dixon Polling & Research, sponsored by the National Safety Commission.
According to the same poll, 86 percent of those surveyed support enacting Move Over laws in all 50 states, and 90 percent believe traffic stops and roadside emergencies are dangerous for law enforcement officers and first responders.
In an effort to get the word out about life-saving Move Over laws, a coalition of traffic safety and law enforcement groups launched a nationwide public awareness campaign. Known as “Move Over, America,” the partnership was founded in 2007 by the National Safety Commission, the National Sheriff’s Association and the National Association of Police Organizations. The coalition was recently joined by the American Association of State Troopers.
Here are answers to motorists’ frequently asked questions about Move Over laws:
If I see an emergency vehicle on the side of the highway with its lights flashing, should I immediately switch lanes?
No, the first thing you should do is slow down so that you can figure out your next move. If you’re on a multi-lane highway, change lanes as soon as it’s safe to do so. Move over so that there is at least one empty lane between you and the emergency vehicle on the roadside.
What if I can’t switch lanes soon enough or if I’m on a two-lane road? Should I stop my car?
No, do not stop your car unless you are directed to do so by a law enforcement officer or another emergency responder directing traffic. If you stop, you will block the flow of traffic, which could result in an accident. If you cannot switch lanes due to traffic or if you are on a two-lane road, simply slow down to at least 20 mph below the speed limit before you pass the emergency vehicle.
How can I prevent having a wreck myself while trying to move over from emergency vehicles?
When you spot an emergency vehicle with lights flashing on the roadside up ahead, the most important thing to do is keep your eyes open and stay alert. Scan the roadway ahead of you and stay aware of vehicles around you. This will allow you to anticipate potential problems and assess the situation so that you can react quickly and safely.
Whether or not your state has enacted Move Over laws, all motorists should do the responsible thing and follow these general safety rules. After all, it could mean the difference between life and death for an emergency responder or law enforcement officer.
If you’re about to hit the road with young kids in tow, listen up. It’s extremely likely that you either have the wrong child safety seat in your car or that your seat is not installed incorrectly. As a matter of fact, nearly three out of every four child seats in U.S. cars show an obvious mistake in selection or installation that could pose a risk to the child’s safety.
Of course, with a barrage of different child seat options, safety regulations and complex installation instructions, it’s no wonder parents often get confused. However, one tiny child seat blunder could result in tragic consequences. So before you strap in your precious cargo and get motoring, take a closer look at that child safety seat.
Here are a few things every parent or caregiver should know about child safety seats:
The right seat
Countless parents make their first child safety seat misstep in the store simply by purchasing the wrong type of seat. Here’s a quick guide on what type of seat you should buy your child:
- Rear-facing seats: Infants should ride in rear-facing child safety seats for as long possible, according to pediatricians and safety experts. You should not switch your child to a forward-facing seat until she is both one year old and weighs 20 pounds or more.
- Forward-facing seats: Once your child has his first birthday and reaches the 20-pound mark, you can switch him to a forward-facing seat. Your child can continue to ride in a forward-facing seat until he grows tall enough that his ears are level with the top of the seatback, his shoulders go beyond the top-most harness slots or he reaches the seat’s weight limit, as specified by the seat’s manufacturer. (Refer to the seat’s manual or look on the back of the seat for the weigh limit.) Forward-facing seats typically have a weight limit of 40 pounds.
- Booster seat: Once your child is too big for a forward-facing seat, you should switch him to a booster seat. (The average child typically moves into a booster seat around the age of four.) According to the National Highway Traffic Safety Administration, your child should continue riding in a booster seat until they are 8 years old or 4’ 9” tall. Here’s another way to test whether your child still needs a booster: if he can bend her knees comfortably at a 90-degree angle when he sits with his spine flat against the seatback, your car’s shoulder belt straps across his chest (as opposed to his throat), and the car lap belt fits across his hips (not his stomach), then he is probably ready to ride without a booster seat.
- Back seat: Once your child is big enough to stop riding in a booster seat, he should ride in the back seat of the car until he is at least 13 years old. Of course, he should wear a lap and shoulder seat belt at all times, as should everyone in the car.
Some states have passed specific child safety seat laws, so make sure you know and abide by the law in your state.
The perfect fit
Another child seat mistake many parents make is the way the harness fits on their child. Experts say many parents do not pull the harnesses snugly enough on the child.
To ensure that your child’s harness fits properly, try the “pinch test.” If you pinch the car seat strap lengthwise and there is a loop of any size between your thumb and forefinger, the harness is not tight enough.
Of course, the biggest challenge with child safety seats is installing them correctly. Because every car and child seat is different and installation manuals are often incredibly confusing, parents are bound to make mistakes when installing their child’s seat.
Luckily, in 2002, the federal government mandated LATCH (Lower Anchors and Tethers for Children). This system improves child safety by eliminating the need to use seat belts to install a child safety seat in a car, and it also makes the installation process a little easier. Cars with the LATCH system have anchors located in the back seat where child safety seats can easily be fastened. Nearly all vehicles and child safety seats manufactured on or after September 2002 include the LATCH system. However, if you have an older car or child seat, you will still need to use the seat belt to install the seat.
To ensure that your child’s safety seat is installed correctly, find a child safety seat expert in your area. You can find a list of certified CPS (Child Passenger Safety) Technicians and Child Seat Fitting Stations at www.nhatsa.gov or seatcheck.org. You can also call 866-SEAT-CHECK or the NHTSA hotline at 888-327-4236.
With the dawning of Spring often comes a deluge of rain showers and thunderstorms. While a soft Spring rain may seem innocent enough from the safety of your home, even a gentle shower can cause major problems on the road. Thousands of car accidents each year are caused by rain and wet roads—and motorists who don’t know how to drive on them.
During and after a rainstorm, a film of water quickly forms on asphalt roads. This sheath of water causes tires to lose traction, which means drivers can easily lose control. However, slippery roads are not the only danger to driving in the rain. Drivers also lose visibility during a rainstorm. Heavy rain can be absolutely blinding, fogging up the windows and even blocking your headlights. These things all add to an extremely dangerous situation.
If you find yourself on the road during a rainstorm, follow these safety tips to ensure you arrive alive:
- Be especially careful when the rain first starts. When the roads are dry for a long period of time, engine oil and grease builds up on roads and highways. As soon as the first drops of rain start to fall, the water mixes with this build-up making the roads incredibly slick. This is why the first few hours of a rainstorm can be the most hazardous for drivers. If the rain continues to fall for a few more hours, the water will eventually wash away the greasy build-up.
- Slow down. You should always drive at a slower speed when the roads are wet. The faster you drive in a rainstorm, the more likely you are to have an accident. Leave the house earlier than usual to give yourself additional travel time so you won’t feel the urge to rush.
- Brake earlier and slower. When you need to slow down or stop on wet roads, ease on the brakes earlier and with less force than you would normally. This decreases your risk of hydroplaning and keeps a safe distance between you and the car in front of you. It also alerts any drivers behind you to slow down. If you stop too suddenly in a rainstorm, you could get rear-ended.
- Turn off cruise control. When you have cruise control turned on during a rainstorm, your car could actually speed up if you hydroplane. Plus, when you use cruise control, you’re probably not paying as much attention to the road. Turn off the cruise control and stay alert at all times when driving in the rain so you can react quickly if necessary.
- Avoid big “puddles.” If you spot a huge puddle in the road up ahead, drive around it or take a different route. Sometimes seemingly shallow puddles can actually be 5 or 6 feet deep—and that amount of water can cause serious problems for your car’s electrical system. Depending on how deep the water is, it could even float your car. If you aren’t sure just how deep a puddle is, steer clear of it altogether.
- Turn on your headlights. Even if just a few raindrops are falling, turn on your headlights. Not only will this help you see the road, but it will help other drivers see you. However, don’t use your high beams in the rain. This can actually reduce your visibility and blind other drivers.
- Turn on your defroster. Your windshield can fog up quickly during a rainstorm, which can cause you to lose sight of the road. Turn on your front and rear defrosters and the A/C to defog your windows.
- Keep an eye out for pedestrians. In a rainstorm, a pedestrian’s view of the road could be obscured by their rain slicker hood or umbrella—which means they may accidentally step into the road at the wrong time. If you are driving in a city or another area with pedestrians, keep a close eye out for people in the road.
- Pull over when things get bad. If the rain is falling so hard that you can barely see the car in front of you, pull over and wait for the rain to slow down or stop. After all, it’s much better for you to make it to your destination a little late than not at all.
Don’t brake if you hydroplane. If you feel your car starting to hydroplane, don’t brake suddenly or turn the steering wheel. This could send you into a skid. Instead, ease off the gas pedal slowly and steer straight until you feel your tires regain traction. If you have to brake and don’t have anti-lock brakes, tap the brake pedal lightly. If you do have anti-lock brakes, you can brake normally.
Research shows motor vehicle crashes are the leading cause of teen deaths. Tragically, 3,490 teenage drivers (between the ages of 15-20) died in car accidents in 2006 alone, according to the Insurance Institute for Highway Safety (IIHS).
The IIHS, along with other driving safety groups, has spent decades studying teen vehicle fatalities to determine what specific behaviors put teenage drivers in the danger zone. Their research reveals that driving at night, driving with passengers, receiving a learner’s permit before the age of 16 and getting a full license before the age of 18 put teens at a much higher risk of having an accident.
Unfortunately, state laws have failed to keep pace with the latest research. Many critics say states simply aren’t doing enough to protect teens on the road. That’s why the IIHS is imploring parents to step up and set stricter driving limits for their teen drivers.
If you want to keep your teenager safe on the road, consider the following advice the IIHS has to offer:
Make them wait
According to the IIHS, 16-year-olds have the highest rate of car crashes than drivers of any age. Sadly, many of these accidents prove to be fatal. This is why the institute strongly encourages parents to wait until their child turns 16 before allowing them to get a learner’s permit and until 17 to get a driver’s license.
Once the teen receives their learner’s permit, the IIHS says parents should put their teen through a learner stage that lasts at least six months. Parents should supervise a minimum of 30-50 hours of their teen’s driving before allowing them to get a full license.
After the teen earns their driver’s license, the institute says parents should restrict their teen’s driving until he or she is at least 18 years old. Specifically, teens should not drive at night and be limited to just one or no non-adult passengers.
Restrict night driving
Once your teen has earned his license, it’s crucial to restrict him from driving at night until he is at least 18. A 2003 IIHS report shows that driving between the hours of 9 p.m. and 5:59 a.m. triples a 16-year-old’s risk of having a fatal car crash.
Not only is it harder to drive in the dark because of low visibility, but teens are typically more tired at night. Driver fatigue is a major contributing factor when it comes to night-time teen crashes. Of course, the chance of teenagers consuming alcohol also increases as soon as the sun sets. According to the NHTSA, 31 percent of teen drivers killed in 2006 had been drinking.
Limit teen passengers
More than half of all deaths in crashes of 16 and 17-year old drivers occur when passengers under the age of 20 are in the car with no adult supervision. When a teen driver has a teen passenger in the car, they are twice as likely to have a fatal crash, according to IIHS. When a teen has three or more teenage passengers, their risk of a fatal crash is three times higher than if they had no passengers.
Of course, it’s no surprise why this is the case: passengers often cause distractions for teen drivers. However, researchers also believe that teens often “show off” for their teenage passengers by speeding and making riskier choices on the road.
Don’t let state laws dictate the driving limits for your teenager. The research shows that state legislation is simply too lenient for most teenagers. As soon as your child is old enough to understand, start preparing him or her for your unique household driving rules. If you make the idea of “no driver’s license until you’re 17” a family mantra, your teen will be prepared for it when the time comes.
Of course, if you tell your 15-year-old she’ll have to wait until she’s 17 to get a full driver’s license, you’ll probably meet some serious resistance. You’ll also have to listen to endless complaints when you tell your teen he can’t drive at night and is not allowed to have passengers. While it’s never fun to play the “bad guy” or upset your teen, it will be well worth it in the long run. Stick to your guns—after all, it could save your child’s life.
For more information on teen driving safety, visit www.iihs.org.
“Bill, can I borrow your truck? I have to pick up a new mattress.” Questions like this are routine. Friends and neighbors borrow and lend their vehicles. College roommates borrow their friends’ cars. Six cars are parked in a driveway at a party and one needs to be moved so another car can pull out. The owner tosses someone the keys and tells him to move it. When situations like these end with an auto accident, whose insurance pays – the owner’s or the borrower’s?
In general, the vehicle owner’s policy is primary and pays first in the event of a loss. If for some reason the owner’s policy does not cover the loss or provide enough insurance to fully cover it, the borrower’s policy will apply. For example, assume that Joe has a policy with an insurance limit of $100,000 for injuries to one person and Bill’s policy has a limit of $250,000. Joe borrows Bill’s car and severely injures a pedestrian, resulting in damages of $300,000. Since Bill owns the car, his policy will pay first. It will pay $250,000 (his limit of insurance,) and Joe’s policy will pay the remaining $50,000. If Bill’s policy does not cover the loss (for example, if he had let the policy lapse,) Joe’s policy would pay all of its $100,000, but Bill and Joe might be individually responsible for paying the balance.
The owner’s insurance will also be primary for damage to the car itself. However, the borrower’s insurance can make up for a difference in deductible. Suppose Joe has a $500 collision deductible on his car and Bill’s collision deductible is $1,000. Joe totals Bill’s $5,000 car in an accident. Bill’s insurance will pay $4,000 for the car ($5,000 minus the $1,000 deductible,) and Joe’s insurance will pay $500 (Bill’s deductible minus Joe’s $500 deductible.) If Bill’s insurance is uncollectible because he didn’t buy collision coverage, Joe’s policy will pay $4,500 ($5,000 minus the $500 deductible.)
A person must have the car owner’s permission to borrow before the owner’s insurance will cover him. The insurance company will consider the person to have permission if he had a reasonable belief that he could use the car. For example, if Bill at one time said to Joe, “Take the car whenever you need to; the keys are on my desk,” and Joe had in fact borrowed it several times with no objection from Bill, it would appear that Joe had a reasonable belief that he could use it. On the other hand, if Bill never said anything to Joe about using the car, and Joe had to search Bill’s home to find the keys, Joe’s belief that he could use it might not appear to be so reasonable. In this case, Bill’s policy might not cover Joe’s liability for injuries or damages. Worse, Joe’s policy might not cover him, either.
Permission must come from the vehicle’s owner, not from a member of the owner’s family. Joe will not have coverage if Bill didn’t give him permission but Bill’s teenage daughter told him to use it. However, the daughter has coverage if she borrows the car, with or without permission. A member of the owner’s family has coverage without having to prove they had permission. To be considered a family member, such a person must be related to the owner by blood, marriage or adoption.
Before borrowing someone else’s car, we advise people to do the following:
- Make certain you have the owner’s permission.
- Make certain the owner has insurance in-force on the car.
- Check your own insurance to see if it will cover damages the owner’s policy doesn’t cover.
An insurance agent can assist you with the third item. Ask the questions ahead of time to avoid unpleasant surprises later.
For decades, parents have sent their teenagers to driver’s education classes. Whether their child was taught by the high school gym teacher or a true driving expert, parents took comfort knowing that their teen was learning the safest driving techniques. That is, until 30 years ago when a federal study showed that learning to drive from a professional had no effect on the number of teen car crashes and fatalities.
More recent studies by the Insurance Institute for Highway Safety (IIHS) have revealed that driver training, whether taught in high school or at driving school, may not benefit teen drivers. As a result, word on the street is that driver’s education classes simply aren’t effective.
Driver’s ed: Still worth your while?
Despite the studies, anecdotal evidence still shows that it could be worth your time and money to send your teen off to driver’s ed. Why? First of all, teens have to learn how to drive from someone—and if you’re not up to the task, you may need to turn to a pro.
Plus, teenagers may be more likely to listen to and absorb information from a driving instructor than their parents. After all, many teens simply “turn off” their own moms and dads. You know the old saying: In one ear and out the other.
On top of that, if you have any bad driving habits of your own, whether it’s a lead foot or a tendency to get distracted from the road, your teen will pick up these behaviors if you teach them to drive. This is exactly why a driver’s ed class could still prove to be beneficial for your teen.
Find the right program
Of course, driver’s ed classes are not all created equal. That’s why driving experts urge parents to take a closer look at a driver’s education program before enrolling their teen in the course.
But what exactly are you looking for? For starters, the program should focus on much more than simply how to pass the driver’s test. After all, you can pass the driver’s exam and get your license but still be an unsafe driver on the road. Experts say a good driving course should teach teens about risk reduction, including hazard recognition, vehicle handling, space management and speed management.
You get what you pay for
While a public school driver’s ed class may be affordable and convenient, not all of these classes are as effective as private driving school courses. Many public school districts have been forced to cut driver’s ed programs due to budget constraints. If your teen’s public school offers a course, be sure to scrutinize the program closely before enrolling your teen. You might discover it’s worth it to pay a little more for a privately-taught course.
Most private driver’s education courses charge between $250 and $350. If you pay much less than that, your teen probably won’t get the proper driving and safety techniques.
But how can you be sure you’re getting your money’s worth? Experts say you should look for a program that offers the following:
- At least 36 hours of class lasting 9 weeks or longer
- A minimum of six hours of on-the-road training, spread out over several days
- A written curriculum or study plan the instructor is willing to share with you (When you look at the study plan, make sure it isn’t just focused on passing the driver’s test, but also about basic skills, defensive driving, safety, etc.)
- An open door policy that allows parents to make suggestions and ask questions
- Plenty of extra advice for parents trying to reinforce good driving skills
You may also want to look for a course that incorporates digital teaching methods, such as computer games. After all, this generation of teens is extremely technical—there’s tons of evidence that shows today’s teenagers learn more from “interactive teaching” than a chalkboard and textbook.
Ask for recommendations
You may also want to ask parents of teenagers who are already driving where they sent their children for driver’s education. Your colleagues, friends and neighbors may be able to recommend a great course—or at least steer you away from a bad one.
Even if you decide to send your teen to a driver’s ed course, it’s important to stay involved with your son or daughter’s driving education. Ride with your teen as often as possible, on weekends, after school, etc. This will allow you to monitor their progress and ensure they are learning safe and effective driving skills.