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Risk Coach
Streets & Highways

When You Cause Injury

If you’re found to be at fault for an accident that causes injuries, the injured parties can make a claim against you for:

  • Ambulance fees, medical care, and equipment costs
  • Disfigurement and permanent injuries
  • In-home care fees
  • Long-term care costs
  • Loss of wages and future earnings
  • Rehabilitation costs
  • Pain and suffering
  • Service fees (e.g., home repair activities the injured party is not able to handle)

If the injury becomes a fatality, you may be assessed:

  • Funeral costs
  • Pain and suffering
  • Loss of future earnings
  • Loss of enjoyment of life

Lessons Learned: Carefully consider your bodily injury liability coverage amount. States can have outdated minimum requirements that may not be sufficient to provide you with realistic protection in the event of an accident. Remember that more than one person may be injured in the accident and your coverage amounts may not meet the cost of all the claims against you.


Uninsured and Under-Insured Drivers

One in eight drivers you pass today won’t be insured. More won’t have enough insurance to cover damages in accidents they cause. Others carry such low amounts of coverage that they would not be able to meet your claim against them in case of a major accident. Many uninsured drivers don’t purchase insurance for financial reasons; if they can’t afford insurance or have a vehicle in uninsurable condition, they aren’t likely to be able to pay for damage to your vehicle or for your injuries.

A Genuine Risk

  • 15% to 26% of drivers are uninsured (the percent varies by state).
  • Approximately 14% of car accidents are caused by uninsured motorists.
  • Approximately 19% of motor vehicle fatalities involve drivers with invalid licenses (and no insurance).
  • $15,443 is the average cost of a bodily injury claim.

Risk Factors for Encountering an Uninsured, Underinsured, or Unlicensed Driver

  • Unemployment may influence the decision to drive without insurance; therefore, it’s reasonable to expect more uninsured drivers in an economic downturn.
  • Those who regularly drive in less-affluent areas encounter a higher percentage of individuals with minimal or no insurance.
  • Commuting in heavy traffic, especially on highways and freeways, exposes you to a higher percentage of uninsured and underinsured drivers.

Lessons Learned: Get Realistic Coverage for Real Exposures

Check the Uninsured/Underinsured limits on your policy’s Declarations Page. They may not be sufficient to cover your medical, rehabilitation, and other costs if you are injured by a driver who has little or no coverage. Review the Uninsured/Underinsured Property Damage limits, too. (Please note that this coverage may not be available in some states.) Would they be enough to cover serious damage done to your property?


Teen Drivers – Costs, Coverage & Limits

Adding a teen driver to your auto policy can more than double your premium. You may be tempted to try to cut costs by opting for lower limits, but that’s not wise.

High Risk

According to the Centers for Disease Control and Prevention, drivers ages 15 to 19 have the highest number of accidents of any age group – almost three times higher than the next highest group. Drivers ages 15 to 24 are only 14% of the population, but account for about 58% of all vehicle-related injuries:

  • Young male drivers account for 30% (about $19 billion) of all motor vehicle accident injury costs; in 2011, the fatality rate was almost double that of female drivers of the same age.
  • Young female drivers account for 28% (about $7 billion) of all motor vehicle accident injury costs.

Controlling Your Premium

These insights into the frequency of teen accidents illustrate that lower limits could end up costing you a lot in the very likely event your teen driver is in an accident. Make sure your policy’s liability coverages will protect you in case of a major claim.

Depending on your state of residence, there are a few things you can do to help offset the higher premiums:

  • Discounts for good students – many insurance carriers offer a “Good Student” discount for teens who maintain a “B” average or better.
  • Driver’s education course graduates – carriers will often provide a discount for inexperienced drivers who pass a driver’s education course.
  • Student away at college – if your teen goes to college a certain number of miles away from home (approximately 100 or more) and does not keep a vehicle at school, you may be eligible for a discount or credit on your policy.
  • Clean driving record – if everyone on your policy has a clean driving record, meaning no accidents, moving violations, DUI convictions, or license suspensions or revocations, etc., you’ll most likely see a favorable effect on your rates.

Lessons Learned: Auto premiums increase when a teen is added to a policy because of the frequency and severity of accidents involving teen drivers. You can help offset the rise and increase your teen’s odds of avoiding accidents by ensuring he or she graduates from a driver’s education course. Also, encourage good study habits. “Good student” status not only can lower your premium, but studies have shown that teens who are good students are in fewer accidents.


When You Need Assistance With A Disabled Vehicle

Your auto insurance may include emergency roadside assistance services with optional Towing & Labor coverage. Most services include:

  • Countrywide 24/7/365 services – important if you travel often or take driving vacations
  • Flat tire, lockout, and jump-start assistance
  • Towing after a disablement
  • Winching
  • Emergency fuel delivery

A good service would also include the following:

  • Emergency delivery of enough gas, oil, or water to get you to the nearest service station
  • Service at no charge for family and friends using your vehicle with your permission

Lessons Learned: Emergencies never occur at a convenient time. Emergency roadside services are an important safety measure. If you have an inexperienced driver in your household who is apt to run into difficulties, this is a key service to add to your policy. If those who use your car frequently are not comfortable with changing a flat tire by the side of the road, jump-starting a dead battery, or trying to open a locked vehicle without a key, you should ensure you have these services.


When You Cause Property Damage

You might be surprised at how much a property damage claim against you can be. Required state minimum coverage for property damage can be as little as $5,000. It’s nowhere near enough if you are responsible for totaling a new or nearly new vehicle:

  • Ford F150 – valued at approximately $45,000
  • Toyota RAV4 – valued at approximately $24,000
  • Honda CRV – valued at approximately $26,000

It could cost much more if you were to lose control of your vehicle and also hit a fence, house, store, or other type of structure.

Lessons Learned: Your property damage coverage should be enough to meet claims against you for damaging other vehicles, structures, or other types of property. Minimum coverage levels could leave you exposed for hundreds of thousands of dollars in out-of-pocket costs.


Safer Vehicles for Teens

An old “beater” may be your first instinct for your new driver, but newer safety technologies like those listed below can help compensate for inexperience and reduce accident frequency and severity.

  • Adaptive headlights
  • Extended air bags
  • Antilock braking systems
  • Camera and laser technology
  • Electronic stability control
  • Tire-pressure monitors
  • Traction control systems

There’s another upside to purchasing a vehicle with newer safety features: premiums are usually lower because of the lower risk of serious accidents and injuries.

Track Record

Check the National Highway Traffic Safety Administration’s crash ratings tests to see which models perform best.

Vehicle Size and Capacity

Small cars are associated with elevated injuries and fatalities, but larger vehicles can also present a major risk. Accident statistics show that teen drivers who have multiple passengers experience a higher percentage of accidents than those driving alone or with only one passenger.

Hold the Horses!

High-performance vehicles and teen drivers are a bad combination. It’s far too easy for an inexperienced driver to over-accelerate in challenging situations. Fast cars are exciting, and many teens have simply not matured enough to let safety considerations outweigh the thrill of a fast ride.

Lessons Learned: Old cars and high-performance vehicles are rarely safe cars for youthful drivers. Help compensate for their inexperience by investigating vehicle safety information before you purchase a vehicle for your teen.


Floods, Hail, Fire & More

Comprehensive and Collision coverages are usually optional, but there can be big consequences if you don’t have these coverages. If you have only liability insurance on your auto, you aren’t covered for damage to your vehicle caused by collisions with other vehicles, animals, or trees; or by vandalism, theft, flood, hail, and a whole host of other things that can damage or total your vehicle.

Lessons Learned: Unless you can easily afford to repair your vehicle, consider Comprehensive coverage. It applies when your vehicle is damaged by causes other than a collision. Collision coverage would apply to damage done to your vehicle that is caused by its hitting another object.


The True Impact of a DUI

DUI convictions cost much more than you may think – as much as $24,000. That’s just for first-time offenders who have not caused injuries or damaged property.

Costs you may incur:

  • Bail, lawyers’ fees, fines, and court costs
  • Vehicle towing and impound costs
  • Mandatory DUI prevention/treatment program
  • Alternate transportation when your license is revoked
  • Vehicle ignition-locking device – installation and device fees and monthly maintenance fee
  • Insurance – a conviction can raise premiums by more than $1,000 the first year and almost as much for the next two.
  • Job loss/wage loss – some employers have a no-tolerance policy for employee DUIs and will terminate a convicted employee. Even if you are not terminated, the hours you spend in court, mandatory treatment sessions, and performing community services can add up to weeks out of work.

Lessons Learned: A DUI can set you back years financially and professionally. There’s never a good reason to drive if you’ve been drinking or are under the influence of a substance that causes impairment.

Cars & Drivers

Kids & Carpools

It’s likely that you occasionally transport your children’s friends or teammates or even participate in a carpool. If you have young children, you may coordinate pickups and drop-offs with other parents. Doing so can be economical and efficient. But it is also a potential source of a major liability claim against you. If you are in an accident, you may be held liable for your passengers’ injuries and medical expenses. Please examine your policy’s liability limits and consider to what extent they would protect you.

Lessons Learned: If you regularly provide rides to your children’s friends, it’s a good idea to review your auto liability limits to see to what extent they’d protect you in case of injury to your passengers.


Your Child Away at College

Your adult child should be covered by an auto policy – even if he or she does not have a vehicle while at school.

  • It’s likely students will still be driving, even if intermittently. They may:
    - Use a car on weekends and vacations
    - Borrow a friend’s car
    - Drive another person’s vehicle on a road trip
  • While coverage provisions vary by state, auto policies with the appropriate coverage can cover injuries they sustain from being hit by a car when walking or bicycling, or when riding as a passenger in a car and the at-fault party is either uninsured or underinsured.

If the student owns the vehicle and the title is in his or her name, an individual policy is required.

Consider Appropriate Limits

If you plan to keep your child on your policy while he or she is away at school with a car, consider your coverage limits very carefully, because the probability of loss will change.

  • Students who have a car often act as the dorm chauffeur – which is a major liability risk.
  • Students may lend their car to friends – who may or may not be responsible drivers and who are almost certainly in the high-risk age group.

Ways to Lower Your Premium

  • Ask your insurance company if you can designate your child who is away at college as an “Occasional Driver.”
  • If your child is many miles away (the distance criteria varies by insurance company), you may qualify for a “student away at college” discount.

Lessons Learned: Unless you know that your child will not be driving a vehicle – even infrequently – keep him or her on your auto policy. You may qualify for a “student away at college” discount if your student does not have a vehicle on campus.


Collector Cars

If you own a collector car, congratulations! They are a whole world unto themselves and endlessly interesting. They are also somewhat challenging to insure, due to their rarity, value, and unique features.

Here are a few things to consider when you insure your collector vehicle:

  • Valuation basis – how will the insurance company establish the value of your car? Does it offer claim payments based on an actual cash value that you mutually agreed on at the inception of your policy, or are they based on a stated value and subject to a coverage limit?
  • Will depreciation apply?
  • Mileage limitation – does the policy require you to drive the car no more than a set number of miles each year?
  • Use clause – does the policy allow you to drive the car for pleasure?
  • Does the policy offer towing or roadside assistance services that guarantee a flatbed in case of breakdown?

What to Do

Do your homework. Make sure the insurance company you choose is well-versed in the needs of collector vehicle owners and can provide you with the necessary specialty coverage and services.


Thefts From Your Vehicle

You’d be very unhappy if a thief broke into your vehicle and stole your stuff. If you didn’t have homeowners or renters insurance, you’d be even more unhappy to find out that an auto insurance policy wouldn’t cover the theft of your personal belongings. Theft of the vehicle itself or vandalism to it is covered, but theft of its contents is not. Your homeowners or renters policy, however, would usually cover it.

Lessons Learned: It’s not always intuitive to know which of your policies covers what property. Theft from your vehicle is another good reason to carry homeowners or renters insurance.


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