Monthly Archives: March 2017

Young Drivers, Marijuana and Car Insurance

Marijuana, young drivers and serious car accidents are on a collision course. Fatal crashes involving drivers whose systems showed evidence of THC, the active ingredient in marijuana, nearly tripled in 10 years, rising from 4.2 percent in 1999 to 12.2 percent in 2010, according to a study released earlier this year by Columbia University’s Mailman School of Public Health. In another four-year study, 43 percent of fatally injured drivers under 24 tested positive for cannabinoids. The percentage was lower for older age groups.

Now that marijuana is legal in Colorado and Washington and widely tolerated elsewhere in the U.S., parents may be on their own collision course with pot: They face steep car insurance hikes and even cancellation if young drivers on their policies are convicted of a DUI stemming from marijuana use. Here’s what parents need to know about drugged driving and the effect it can have on insurance coverage.

Drugged Driving: A Growing Concern
Pot use behind the wheel is a subset of a category that law enforcement and the traffic safety community call drugged driving. Every state has laws addressing it. In many, the laws say if a driver is stopped and authorities can prove the individual drove under the influence of any substance that impairs driving ability, he or she could be convicted of a DUI. Nearly one-third of states feature “per se” laws. These more strict laws say that any amount of a controlled substance found in the driver’s body is evidence of impaired driving.

The hazards of drunken driving are well known. A growing concern among researchers, law enforcement and those in the traffic safety community is the destruction wreaked by individuals driving under the influence of drugs including marijuana, cocaine and prescription and over-the-counter drugs. Conservative estimates put the cost of these accidents at 6,700 deaths and nearly $60 billion in costs each year.

The effects of marijuana use on driving vary from one person to the next. In the words of the National Highway Traffic Safety Administration (NHTSA), “It is difficult to establish a relationship between a person’s THC blood or plasma concentration and performance impairing effects.” Concentrations of the drug are “very dependent on patterns of use as well as dose.”

Insurance Follows the Car
Driving while stoned is a serious matter for teen and twenty-something drivers, who risk death, injury, criminal prosecution and civil lawsuits. In addition to those outcomes, drugged driving also can have financial impacts on parents, who often own and insure the cars their adult children drive.

“Insurance follows the car, not the driver,” says Loretta Worters, vice president of communications for the Insurance Information Institute, a national insurance trade association. A young person’s drugged-driving conviction is likely to be treated like a drunk driving conviction, whether the recreational use of pot is legal in that state, says Bob Passmore, personal lines policy senior director with the Property Casualty Insurers Association of America.

“As with any DUI conviction, your insurance company could cancel your policy, ask you to take the individual off the policy, or keep him or her on at a much higher rate, depending on the rules in the state,” Passmore says. “The individual with the conviction might need to get their own policy.” That would come at a much higher rate than if the driver is on his parents’ policy, he says.

Worters agrees. If a young person is convicted of driving under the influence, “insurance rates will jump astronomically, because driving under the influence is illegal,” she says. “DUI convictions can result in multi-year jail terms. You’re also putting the parents’ assets at risk” if there are civil lawsuits in connection with the accident, she warns.

Not every teen uses pot, of course. In 2012, less than 8 percent of youths ages 12-17 had used marijuana in the past month, according to the 2012 National Survey on Drug Use & Health. And about 80 percent of teens say they disapprove of their friends using pot. Pot use increases markedly for young adults, however. In 2012, 18.7 percent of 18-to-25-year-olds had used marijuana in the past month.

If your child does use pot, you may need to take a tough stance when it comes to his or her use of your cars.

“Parents may want to consider either taking the car privileges away until they’ve cleaned up their act, or taking them off your insurance policy,” Worters says. An insurance company may not be comfortable with a young driver continuing to be on the policy if they’re “living in the same house, having possible access to the keys, even if they aren’t driving,” she says, “because that risk is always there.”

Talk to Your Insurance Agent
Parents should consider contacting their insurance agent to assess their coverage, preferably before a teen drives under their car insurance policy, experts says. Parents also might want to review their liability limits and consider an umbrella liability policy. This will provide protection in case their child causes a serious injury and is sued.

Why You Need to Buy Motor Insurance, Even if Your Car is Off-Road?

The Motor Vehicles Act of 1988 requires all vehicles used for either social, domestic or pleasure purposes to be covered by valid insurance. Under the provisions of Chapter 11 (Section 145 to 164) of this Act, driving motor vehicles in public places without third party insurance is a punishable offence. Hence, Third Party Motor Insurance for vehicles is a statutory requirement.

Insurance is a contract whereby the insurer undertakes to pay the insured person a sum of money in the event of a happening or in the event of specific events. Motor Insurance protects the owner of the vehicle against damages to the vehicle and also pays for any liabilities owed by the vehicle owner as per law. The owner of the vehicle is legally liable for any injury or damage to life or property caused by used of the insured vehicle.

What does Motor Insurance Cover?

Motor insurance can be of two types. It can either cover only liability, as is the statutory requirement. Or it can cover liability and a variety of damage to the insured person’s vehicle. This is called as OD (Own Damage) cover and comprises the following types of damages.

  • Fire, Self- Ignition, Explosion, Lightning
  • Burglary, Housebreaking, Theft
  • Riots, Strikes
  • Earthquakes, floods, storms, tempest, inundation, hailstorm, frost, cyclones, hurricanes, landslides, rock slides
  • Accidental external means
  • Malicious Acts
  • Terrorism act
  • While in transit

If you are not using your car for a prolonged period of time, and it just lies in your garage or in a parking facility, paying for car insurance may seem a bother. However, it is still better to pay for third party motor insurance for your car for the protection and coverage offered.

Thievery

Although the common belief is that only new and fancy cars are targeted by thieves, there are no such rules. Parts of older, difficult to find cars, are usually costlier in the market than any of the newer cars available. Thieves may earn more for older unavailable parts. Hence the number of old cars getting stolen is increasing. Whether it is a new car or an old one, it is beneficial to insure it.

Physical Damage

Even in storage, cars may get damaged for a number of reasons, such as floods, fire, earthquake, rain water, and force majeure or due to infrequent use. For example, a car’s engine may get damaged due to flooding or due to rain water entering the engine. Part of the cost incurred for reparation may be covered by some insurers. Similarly, damage caused by some natural calamities such as fire, earthquakes, storms, floods, etc. are covered. Damage caused by strikes, riots, terrorism, burglary, theft, malicious acts and other manmade calamities are also covered.

Use by Others

If you are not using your car, and have rented it to another party for use, the Motor Insurance would provide protection against any liability arising as a result of injury or death caused by the vehicle to the occupants.

Ideally it would be beneficial to the car owner to insure the vehicle, be it in use or out of circulation. Insurance protects the car owner in a number of situations, and provides financial relief in the event of damage caused by or to the vehicle.

Over to You!

Now that you know how important it is to ensure car insurance even if your vehicle is off-road, it makes sense to carefully choose a car insurance that fits well within your budget and matches your preferences and requisites.

So, if you haven’t insured your car yet, go for it now! Remember, your car is where you spend most of your time, after your office and home and that’s why it makes sense to ensure proper cover for your cover.

Car Insurance for Teenage Drivers

The statistics about teenage drivers aren’t good. According to the Insurance Institute for Highway Safety (IIHS), 16-year-olds get into accidents almost six times more often than drivers between the age of 30 and 59. No wonder car insurance premiums are so high for this age group.

However, not all car insurance companies take the same dim view of young drivers. And some discounts are available to help you cut costs. Remember, the higher the risk, the higher the cost of insurance premiums. Let this be your guiding principle as you shop for insurance.

Here are 10 suggestions to help lower premiums and keep your teenager’s license free of violations:

1. Help your teen learn the laws and follow them to the letter. By far, the best way to lower car insurance costs for teens is for them to keep their driving record clean. Make safe driving a family project. In some states, restrictions apply to new drivers. Parents should know what the laws are and insist that their sons and daughters follow them.

2. Set a good example. Do you break the speed limit and tailgate? Do you yell at other drivers when you’re behind the wheel? If you do these things, how can you expect your children to act differently? Start watching your own driving long before they get their license and you’ll have a much easier time convincing them to be safe drivers. Remember, actions speak louder than words.

3. Put your teenager on your policy. Rather than setting up an independent policy for your teen driver, put them on your auto insurance policy as an additional driver. In this way, all the discounts applied to your policies will be passed on to them.

4. Pay your teenager to get good grades. Here’s a creative tip — find out how much you save if your teenager gets a good grade point average and pass it on to them. Usually, having a 3.0 or higher GPA will reduce your car insurance premium by 10 percent. Figure out exactly how much this saves you and give that money to your teenager. This accomplishes two things. First, it provides a direct reward for academic performance. Secondly, it motivates them to continue getting good grades.

5. Enroll them in driver education courses. Discounts are available for teens who take recognized driving classes. But call your car insurance company to find out which schools are covered before paying big bucks.

6. Steer clear of sports cars. Don’t try to live vicariously through your teenager by giving them the hot car you couldn’t get in high school. Getting your teenager a safe car to drive, with the latest safety equipment, will lower your premiums. Not only will you save money on car insurance, but fast driving will be less of a temptation.

7. Get their support. Don’t assume that your teenager wants to vacuum clean your wallet. Ask them for help cutting costs and point out that you will share in the savings (see rule #4). Tell them how much car insurance costs and show them how this fits into the family budget. If nothing else, you will score points for treating them as adults.

8. Talk to your kids about drugs and alcohol. This is a tough subject to broach with teenagers, who think they have everything under control. But the consequences of saying nothing can be catastrophic. Take the time to lay down some guidelines in this important area.

9. Take traffic school to beat tickets. Once a ticket is on your teen’s license, it takes months to get the violation removed. Instead, encourage them to take traffic school if the judge allows it. A day spent thinking about the consequences of unsafe driving can bring rewards for years to come.

10. Ride with your teenager. Your teenager was a safe driver last year when he or she got a license. But what’s happened since then? Let your son or daughter take the wheel while you sit back and relax in the passenger seat. If you see them doing something that breaks rules or seems unsafe, point this out in a diplomatic way. If they are doing a good job driving, praise them for their efforts.

If you follow the above suggestions, you will find that you can make it through the teenage years safely — and without paying an arm and a leg for car insurance. It just takes cooperation and understanding from both sides of the generation gap.

Tips Avoiding Auto Theft and Insurance Problems

What’s worse than experiencing auto theft? Finding out your car insurance policy doesn’t fully cover your loss or out-of-pocket expenses.

A vehicle theft occurs at least twice each minute in the United States, at an estimated cost of $6.4 billion last year. Fewer vehicles are stolen by that legendary joy-riding teen than by pros who drive your car onto a freighter heading overseas, or to a chop shop to cannibalize it for parts.

To help consumers avoid getting burned not just once, but twice, the Council of Better Business Bureaus and the Insurance Information Institute have teamed up with a program called Wiser Drivers Wise Up to address both vehicle theft prevention and what to do if your car is stolen or in an accident. Here are some of their tips:

  • Don’t think manufacturer-installed vehicle theft protection is enough. It can be disabled by experienced and determined thieves, who also know how to unlock a Club and similar devices. Even Steve Cox, a BBB vice president, was the victim of car theft. In fact, he lost two vehicles in three years with these protections; his Pontiac Firebird was stolen in daylight, and his Nissan 300ZX at night. Aftermarket vehicle anti-theft systems are usually more sophisticated and are worth paying a professional to install.
  • Don’t think your old clunker is safer than a shiny new model, or that a luxury sedan is more attractive to thieves than a less expensive model. Older vehicles are usually stolen for their parts, which are no longer being manufactured; newer cars are stolen for their popularity. In 2008, the top five model years stolen were 1995, 1991, 1989, 1997 and 1994, respectively, according to the National Insurance Crime Bureau (NICB). In recent years, cars that have been glamorized in pop culture, like the Cadillac Escalade , have put it on many “most stolen” lists.
  • Contact police immediately, preferably while still at the scene of the crime. Speed is essential to recovering stolen cars, since any delay means your car is more likely to be in a chop shop or driven out of town. Of course you know the make, color and model of your car, but you also should know the license plate number and vehicle identification number (VIN). Keep a copy of those identifying numbers and your insurance card in your wallet, and keep a photocopy of your registration and insurance card at home, so you can provide information quickly to both law enforcement and insurance claims agents.
  • Don’t assume your insurance covers you. Take a close look at your policy to see if you are covered for a replacement rental car if your car is stolen, and if there’s a waiting period before you’re allowed to rent a car. Many people don’t elect the rental car coverage, but it costs only a few dollars a month. A year’s worth of replacement rental coverage usually costs less than renting a car for a day or two, so it’s a good deal.
  • Make sure you have roadside assistance. Your insurance company will likely offer this for a few dollars per term, or you can go through an outside company such as AAA or even your automaker. Be sure to research the details of the coverage. For example, if your car is broken into and disabled, are you covered for a tow to any mechanic, or only a dealer’s service shop? Are both towing and labor costs covered?
  • Despite the bells, whistles and computer chips of today’s technological vehicle theft-prevention devices, the most important theft deterrents are simple ones. Park in well-lit areas. If you park in a lot, resist the temptation to park near the exit, because it makes your vehicle a more likely target for thieves. According to the FBI, more than one-third of all vehicle thefts occur at a home or residence. So always lock your car, even in your own driveway.