There are so many different types of insurance available to Americans that it can be overwhelming. Whole life, disability, longevity ins, mortgage protection, pet ins, cell phone ins, but there are really three specific types of insurance that almost all adults need.
Renters / Home Insurance:
Renters or Home Policies are very similar forms of insurance. Both generally cover you for liability, personal property, and loss of use. Home Ins. additionally covers the structure when you own it. The moment that you are free and clear of your parents insurance policy, perhaps when you graduate from College or High School, "You Should Purchase a Renters Insurance Policy."
A small amount of coverage for your personal property is helpful, but really its the liability insurance that you want and need. Liability insurance can helpful for various situations that you can find yourself in.
Add in a personal injury endorsement to expand the liability protection.
Health Insurance:
American Health Insurance may be overpriced, but it is a right and necessary product when compared with the alternative = no health insurance. Not having any health insurance can have a devastating change on anyone's personal net worth. Ignore health insurance at your own peril.
All Americans really should either get private health insurance. health insurance through their employer, or Medicaid or Medicare through the government.
Consider all the various coverage options when you shop for health insurance.
Auto Coverage:
Auto insurance is insurance for your automobile and you the driver. It is pretty difficult to be allowed to buy a car without auto insurance these days. However when transacted through third parties it can happen. This is a big mistake, not only is it generally illegal not to have insurance on an auto of a certain state determined minimum standard, but it can also be financially ruinous not to carry auto insurance at all times. Don't skip the insurance for even one day.
Young Adults should either be on their parents auto insurance or their own. Knowing when to split off onto your own policy can be complicated. However once you are out of the house, have the title in your name, its usually time to get the insurance policy entirely in your own name.
For folks that do not own a car, consider purchasing Non Owner Auto Insurance. Non owner auto insurance allows you to have car coverage when you drive someone else's car. People that use other peoples cars or rent cars or have some savings should consider this.
Consider purchasing the highest amount of uninsured motorist coverage that you can afford.
The Three Big Ins Forms Americans Truly Need:
There you have it, three insurance forms that all americans really should buy. Yes there are all sorts of useful insurance policies that many consumers should consider such as term life, short and long term disability ins, and earthquake ins - but many of those are not truly for everyone. These three can really are for all adults.
Johnson is an independent life insurance broker based outside San Francisco CA. He believes in insurance consumer education and is an avid advocate of consumer rights.
Renters / Home Insurance:
Renters or Home Policies are very similar forms of insurance. Both generally cover you for liability, personal property, and loss of use. Home Ins. additionally covers the structure when you own it. The moment that you are free and clear of your parents insurance policy, perhaps when you graduate from College or High School, "You Should Purchase a Renters Insurance Policy."
A small amount of coverage for your personal property is helpful, but really its the liability insurance that you want and need. Liability insurance can helpful for various situations that you can find yourself in.
Add in a personal injury endorsement to expand the liability protection.
Health Insurance:
American Health Insurance may be overpriced, but it is a right and necessary product when compared with the alternative = no health insurance. Not having any health insurance can have a devastating change on anyone's personal net worth. Ignore health insurance at your own peril.
All Americans really should either get private health insurance. health insurance through their employer, or Medicaid or Medicare through the government.
Consider all the various coverage options when you shop for health insurance.
Auto Coverage:
Auto insurance is insurance for your automobile and you the driver. It is pretty difficult to be allowed to buy a car without auto insurance these days. However when transacted through third parties it can happen. This is a big mistake, not only is it generally illegal not to have insurance on an auto of a certain state determined minimum standard, but it can also be financially ruinous not to carry auto insurance at all times. Don't skip the insurance for even one day.
Young Adults should either be on their parents auto insurance or their own. Knowing when to split off onto your own policy can be complicated. However once you are out of the house, have the title in your name, its usually time to get the insurance policy entirely in your own name.
For folks that do not own a car, consider purchasing Non Owner Auto Insurance. Non owner auto insurance allows you to have car coverage when you drive someone else's car. People that use other peoples cars or rent cars or have some savings should consider this.
Consider purchasing the highest amount of uninsured motorist coverage that you can afford.
The Three Big Ins Forms Americans Truly Need:
There you have it, three insurance forms that all americans really should buy. Yes there are all sorts of useful insurance policies that many consumers should consider such as term life, short and long term disability ins, and earthquake ins - but many of those are not truly for everyone. These three can really are for all adults.
Johnson is an independent life insurance broker based outside San Francisco CA. He believes in insurance consumer education and is an avid advocate of consumer rights.
1. Letting teens drive too soon
It is no secret that kids develop at different rates when growing up and it is no different for driving. While some kids are ready to drive younger than others (I was 14 when I started driving to school) it is definitely a conversation parents should have with their children. Some should wait to begin driving because they are simply not ready for the considerable responsibility. When you are driving, you are in control of an object that is extremely large and fast moving and can cause serious damage and even death.
2. Insuring your home and vehicles with two different agents
When you are shopping your insurance, in 99% of cases it is best to have everything with one company. When you have your policies with multiple different providers, you are most likely not getting the best rate. Almost every company out there gives you discounts for having everything bundled together with the most common being auto and home. As time has passed, companies are giving discounts for having policies in addition to just the auto and home. Many providers offer significant discounts for having multiple policies, such as life, business, umbrella, off-road, marine and even rental properties.
Outside of price, having one agent also will make your life a lot easier because you are not having to deal with two different people, which will generally lead to two answers for everything. Not all agents are created equal, so finding someone you can trust-who has the knowledge to help you with any questions you might have, as well as recommending what is best for you-is just as important (if not more important) than price.
3. Having a low liability coverage
One of the biggest mistakes you can make with your insurance is having low liability limits. In this day and age, lawsuits are more prevalent than ever and the payouts are only getting higher as medical costs are constantly going up. If medical costs have gone up 25 percent in the past five years, but you still have the same liability limits, you are now 25 percent more likely to have a claim exceed your liability cap.
There are a lot of assumptions when it comes to insurance, and one of them is that having high liability limits is going to cost an arm and a leg. In reality, that is the farthest from the truth. In many cases, you can double or triple your liability for less than a trip out to dinner each month. Is that meal really worth hundreds of thousands of coverage in the event of a liability claim? I don't think so.
So, what liability limits should you have? While it will vary from state to state, I recommend having at least have $500,000 on your auto policy and a $1,000,000 umbrella policy as well. I know, you're probably thinking why on earth would I need $1.5 million worth of coverage?
The first reason is that depending on what state you live in, you may not be able to file bankruptcy on liability claims. What does this mean? This means that if you have $25,000 worth of liability on your auto and were to severely hurt someone causing $300,000 worth of damage, you would be on the hook for $275,000. They can take your car, house, checking and even garnish wages until the claim is paid off. You have to not only think about what you have to lose now but also all of the potential future earning that could be lost.
The second reason is that the average death claim is over $750,000 which means that even if you had $500,000 worth of liability on your auto, which is generally the most an auto policy offers, you could still be on the hook for a quarter of a million dollars.
With insurance, you do have to consider worst case scenarios because that is why we have insurance. By ignoring this fact and purchasing low limits because you're not willing to spend the equivalent of a trip out to dinner is only doing yourself a disservice.
4. Not informing your insurance company you have a new teen driver
If you are knowingly withholding drivers, it could result in the denial of a claim. You could be paying for insurance but because you did not disclose a driver because you didn't want to pay the extra premium, you might be on the hook for a claim in its entirety. Sometimes it is hard to stomach that extra $100 a month for that new driver, but I can guarantee you it would be much more difficult to stomach the repossession of your home if your child got into a serious accident and your company denied the claim because the household was rated inaccurately.
The national average annual rate increases for male teens, according to insuranceQuotes.com:
� 16 years old: 109.65 percent
� 17 years old: 99.12 percet
� 18 years old: 90.45 percent
� 19 years old: 69.08 percent
Rate increases for females are much lower than for their male counterparts:
� 16 years old: 81.63 percent
� 17 years old: 72.69 percent
� 18 years old: 64.81 percent
� 19 years old: 47.58 percent
Following is an interesting study that provides insight on when teenage drivers are most likely to be involved in a crash:
https://www.forbes.com/sites/tanyamohn/2011/10/18/teenage-drivers-a-new-study-provides-fresh-insights/#7b739d7569df
I believe the study is correct in that experience is key. In Nebraska, for example, you have to either log 50 hours with your parents or complete a certified drivers education course. For other states still issuing licenses without any requirements, this would be an effective way to require kids to have more experience before they are allowed to drive on their own. Especially without a cost burden to the state.
Article Source: http://EzineArticles.com/9842341
It is no secret that kids develop at different rates when growing up and it is no different for driving. While some kids are ready to drive younger than others (I was 14 when I started driving to school) it is definitely a conversation parents should have with their children. Some should wait to begin driving because they are simply not ready for the considerable responsibility. When you are driving, you are in control of an object that is extremely large and fast moving and can cause serious damage and even death.
2. Insuring your home and vehicles with two different agents
When you are shopping your insurance, in 99% of cases it is best to have everything with one company. When you have your policies with multiple different providers, you are most likely not getting the best rate. Almost every company out there gives you discounts for having everything bundled together with the most common being auto and home. As time has passed, companies are giving discounts for having policies in addition to just the auto and home. Many providers offer significant discounts for having multiple policies, such as life, business, umbrella, off-road, marine and even rental properties.
Outside of price, having one agent also will make your life a lot easier because you are not having to deal with two different people, which will generally lead to two answers for everything. Not all agents are created equal, so finding someone you can trust-who has the knowledge to help you with any questions you might have, as well as recommending what is best for you-is just as important (if not more important) than price.
3. Having a low liability coverage
One of the biggest mistakes you can make with your insurance is having low liability limits. In this day and age, lawsuits are more prevalent than ever and the payouts are only getting higher as medical costs are constantly going up. If medical costs have gone up 25 percent in the past five years, but you still have the same liability limits, you are now 25 percent more likely to have a claim exceed your liability cap.
There are a lot of assumptions when it comes to insurance, and one of them is that having high liability limits is going to cost an arm and a leg. In reality, that is the farthest from the truth. In many cases, you can double or triple your liability for less than a trip out to dinner each month. Is that meal really worth hundreds of thousands of coverage in the event of a liability claim? I don't think so.
So, what liability limits should you have? While it will vary from state to state, I recommend having at least have $500,000 on your auto policy and a $1,000,000 umbrella policy as well. I know, you're probably thinking why on earth would I need $1.5 million worth of coverage?
The first reason is that depending on what state you live in, you may not be able to file bankruptcy on liability claims. What does this mean? This means that if you have $25,000 worth of liability on your auto and were to severely hurt someone causing $300,000 worth of damage, you would be on the hook for $275,000. They can take your car, house, checking and even garnish wages until the claim is paid off. You have to not only think about what you have to lose now but also all of the potential future earning that could be lost.
The second reason is that the average death claim is over $750,000 which means that even if you had $500,000 worth of liability on your auto, which is generally the most an auto policy offers, you could still be on the hook for a quarter of a million dollars.
With insurance, you do have to consider worst case scenarios because that is why we have insurance. By ignoring this fact and purchasing low limits because you're not willing to spend the equivalent of a trip out to dinner is only doing yourself a disservice.
4. Not informing your insurance company you have a new teen driver
If you are knowingly withholding drivers, it could result in the denial of a claim. You could be paying for insurance but because you did not disclose a driver because you didn't want to pay the extra premium, you might be on the hook for a claim in its entirety. Sometimes it is hard to stomach that extra $100 a month for that new driver, but I can guarantee you it would be much more difficult to stomach the repossession of your home if your child got into a serious accident and your company denied the claim because the household was rated inaccurately.
The national average annual rate increases for male teens, according to insuranceQuotes.com:
� 16 years old: 109.65 percent
� 17 years old: 99.12 percet
� 18 years old: 90.45 percent
� 19 years old: 69.08 percent
Rate increases for females are much lower than for their male counterparts:
� 16 years old: 81.63 percent
� 17 years old: 72.69 percent
� 18 years old: 64.81 percent
� 19 years old: 47.58 percent
Following is an interesting study that provides insight on when teenage drivers are most likely to be involved in a crash:
https://www.forbes.com/sites/tanyamohn/2011/10/18/teenage-drivers-a-new-study-provides-fresh-insights/#7b739d7569df
I believe the study is correct in that experience is key. In Nebraska, for example, you have to either log 50 hours with your parents or complete a certified drivers education course. For other states still issuing licenses without any requirements, this would be an effective way to require kids to have more experience before they are allowed to drive on their own. Especially without a cost burden to the state.
Article Source: http://EzineArticles.com/9842341
1. Letting teens drive too soon
It is no secret that kids develop at different rates when growing up and it is no different for driving. While some kids are ready to drive younger than others (I was 14 when I started driving to school) it is definitely a conversation parents should have with their children. Some should wait to begin driving because they are simply not ready for the considerable responsibility. When you are driving, you are in control of an object that is extremely large and fast moving and can cause serious damage and even death.
2. Insuring your home and vehicles with two different agents
When you are shopping your insurance, in 99% of cases it is best to have everything with one company. When you have your policies with multiple different providers, you are most likely not getting the best rate. Almost every company out there gives you discounts for having everything bundled together with the most common being auto and home. As time has passed, companies are giving discounts for having policies in addition to just the auto and home. Many providers offer significant discounts for having multiple policies, such as life, business, umbrella, off-road, marine and even rental properties.
Outside of price, having one agent also will make your life a lot easier because you are not having to deal with two different people, which will generally lead to two answers for everything. Not all agents are created equal, so finding someone you can trust-who has the knowledge to help you with any questions you might have, as well as recommending what is best for you-is just as important (if not more important) than price.
3. Having a low liability coverage
One of the biggest mistakes you can make with your insurance is having low liability limits. In this day and age, lawsuits are more prevalent than ever and the payouts are only getting higher as medical costs are constantly going up. If medical costs have gone up 25 percent in the past five years, but you still have the same liability limits, you are now 25 percent more likely to have a claim exceed your liability cap.
There are a lot of assumptions when it comes to insurance, and one of them is that having high liability limits is going to cost an arm and a leg. In reality, that is the farthest from the truth. In many cases, you can double or triple your liability for less than a trip out to dinner each month. Is that meal really worth hundreds of thousands of coverage in the event of a liability claim? I don't think so.
So, what liability limits should you have? While it will vary from state to state, I recommend having at least have $500,000 on your auto policy and a $1,000,000 umbrella policy as well. I know, you're probably thinking why on earth would I need $1.5 million worth of coverage?
The first reason is that depending on what state you live in, you may not be able to file bankruptcy on liability claims. What does this mean? This means that if you have $25,000 worth of liability on your auto and were to severely hurt someone causing $300,000 worth of damage, you would be on the hook for $275,000. They can take your car, house, checking and even garnish wages until the claim is paid off. You have to not only think about what you have to lose now but also all of the potential future earning that could be lost.
The second reason is that the average death claim is over $750,000 which means that even if you had $500,000 worth of liability on your auto, which is generally the most an auto policy offers, you could still be on the hook for a quarter of a million dollars.
With insurance, you do have to consider worst case scenarios because that is why we have insurance. By ignoring this fact and purchasing low limits because you're not willing to spend the equivalent of a trip out to dinner is only doing yourself a disservice.
4. Not informing your insurance company you have a new teen driver
If you are knowingly withholding drivers, it could result in the denial of a claim. You could be paying for insurance but because you did not disclose a driver because you didn't want to pay the extra premium, you might be on the hook for a claim in its entirety. Sometimes it is hard to stomach that extra $100 a month for that new driver, but I can guarantee you it would be much more difficult to stomach the repossession of your home if your child got into a serious accident and your company denied the claim because the household was rated inaccurately.
The national average annual rate increases for male teens, according to insuranceQuotes.com:
� 16 years old: 109.65 percent
� 17 years old: 99.12 percet
� 18 years old: 90.45 percent
� 19 years old: 69.08 percent
Rate increases for females are much lower than for their male counterparts:
� 16 years old: 81.63 percent
� 17 years old: 72.69 percent
� 18 years old: 64.81 percent
� 19 years old: 47.58 percent
Following is an interesting study that provides insight on when teenage drivers are most likely to be involved in a crash:
https://www.forbes.com/sites/tanyamohn/2011/10/18/teenage-drivers-a-new-study-provides-fresh-insights/#7b739d7569df
I believe the study is correct in that experience is key. In Nebraska, for example, you have to either log 50 hours with your parents or complete a certified drivers education course. For other states still issuing licenses without any requirements, this would be an effective way to require kids to have more experience before they are allowed to drive on their own. Especially without a cost burden to the state.
Article Source: http://EzineArticles.com/9842341
It is no secret that kids develop at different rates when growing up and it is no different for driving. While some kids are ready to drive younger than others (I was 14 when I started driving to school) it is definitely a conversation parents should have with their children. Some should wait to begin driving because they are simply not ready for the considerable responsibility. When you are driving, you are in control of an object that is extremely large and fast moving and can cause serious damage and even death.
2. Insuring your home and vehicles with two different agents
When you are shopping your insurance, in 99% of cases it is best to have everything with one company. When you have your policies with multiple different providers, you are most likely not getting the best rate. Almost every company out there gives you discounts for having everything bundled together with the most common being auto and home. As time has passed, companies are giving discounts for having policies in addition to just the auto and home. Many providers offer significant discounts for having multiple policies, such as life, business, umbrella, off-road, marine and even rental properties.
Outside of price, having one agent also will make your life a lot easier because you are not having to deal with two different people, which will generally lead to two answers for everything. Not all agents are created equal, so finding someone you can trust-who has the knowledge to help you with any questions you might have, as well as recommending what is best for you-is just as important (if not more important) than price.
3. Having a low liability coverage
One of the biggest mistakes you can make with your insurance is having low liability limits. In this day and age, lawsuits are more prevalent than ever and the payouts are only getting higher as medical costs are constantly going up. If medical costs have gone up 25 percent in the past five years, but you still have the same liability limits, you are now 25 percent more likely to have a claim exceed your liability cap.
There are a lot of assumptions when it comes to insurance, and one of them is that having high liability limits is going to cost an arm and a leg. In reality, that is the farthest from the truth. In many cases, you can double or triple your liability for less than a trip out to dinner each month. Is that meal really worth hundreds of thousands of coverage in the event of a liability claim? I don't think so.
So, what liability limits should you have? While it will vary from state to state, I recommend having at least have $500,000 on your auto policy and a $1,000,000 umbrella policy as well. I know, you're probably thinking why on earth would I need $1.5 million worth of coverage?
The first reason is that depending on what state you live in, you may not be able to file bankruptcy on liability claims. What does this mean? This means that if you have $25,000 worth of liability on your auto and were to severely hurt someone causing $300,000 worth of damage, you would be on the hook for $275,000. They can take your car, house, checking and even garnish wages until the claim is paid off. You have to not only think about what you have to lose now but also all of the potential future earning that could be lost.
The second reason is that the average death claim is over $750,000 which means that even if you had $500,000 worth of liability on your auto, which is generally the most an auto policy offers, you could still be on the hook for a quarter of a million dollars.
With insurance, you do have to consider worst case scenarios because that is why we have insurance. By ignoring this fact and purchasing low limits because you're not willing to spend the equivalent of a trip out to dinner is only doing yourself a disservice.
4. Not informing your insurance company you have a new teen driver
If you are knowingly withholding drivers, it could result in the denial of a claim. You could be paying for insurance but because you did not disclose a driver because you didn't want to pay the extra premium, you might be on the hook for a claim in its entirety. Sometimes it is hard to stomach that extra $100 a month for that new driver, but I can guarantee you it would be much more difficult to stomach the repossession of your home if your child got into a serious accident and your company denied the claim because the household was rated inaccurately.
The national average annual rate increases for male teens, according to insuranceQuotes.com:
� 16 years old: 109.65 percent
� 17 years old: 99.12 percet
� 18 years old: 90.45 percent
� 19 years old: 69.08 percent
Rate increases for females are much lower than for their male counterparts:
� 16 years old: 81.63 percent
� 17 years old: 72.69 percent
� 18 years old: 64.81 percent
� 19 years old: 47.58 percent
Following is an interesting study that provides insight on when teenage drivers are most likely to be involved in a crash:
https://www.forbes.com/sites/tanyamohn/2011/10/18/teenage-drivers-a-new-study-provides-fresh-insights/#7b739d7569df
I believe the study is correct in that experience is key. In Nebraska, for example, you have to either log 50 hours with your parents or complete a certified drivers education course. For other states still issuing licenses without any requirements, this would be an effective way to require kids to have more experience before they are allowed to drive on their own. Especially without a cost burden to the state.
Article Source: http://EzineArticles.com/9842341
1. Letting teens drive too soon
It is no secret that kids develop at different rates when growing up and it is no different for driving. While some kids are ready to drive younger than others (I was 14 when I started driving to school) it is definitely a conversation parents should have with their children. Some should wait to begin driving because they are simply not ready for the considerable responsibility. When you are driving, you are in control of an object that is extremely large and fast moving and can cause serious damage and even death.
2. Insuring your home and vehicles with two different agents
When you are shopping your insurance, in 99% of cases it is best to have everything with one company. When you have your policies with multiple different providers, you are most likely not getting the best rate. Almost every company out there gives you discounts for having everything bundled together with the most common being auto and home. As time has passed, companies are giving discounts for having policies in addition to just the auto and home. Many providers offer significant discounts for having multiple policies, such as life, business, umbrella, off-road, marine and even rental properties.
Outside of price, having one agent also will make your life a lot easier because you are not having to deal with two different people, which will generally lead to two answers for everything. Not all agents are created equal, so finding someone you can trust-who has the knowledge to help you with any questions you might have, as well as recommending what is best for you-is just as important (if not more important) than price.
3. Having a low liability coverage
One of the biggest mistakes you can make with your insurance is having low liability limits. In this day and age, lawsuits are more prevalent than ever and the payouts are only getting higher as medical costs are constantly going up. If medical costs have gone up 25 percent in the past five years, but you still have the same liability limits, you are now 25 percent more likely to have a claim exceed your liability cap.
There are a lot of assumptions when it comes to insurance, and one of them is that having high liability limits is going to cost an arm and a leg. In reality, that is the farthest from the truth. In many cases, you can double or triple your liability for less than a trip out to dinner each month. Is that meal really worth hundreds of thousands of coverage in the event of a liability claim? I don't think so.
So, what liability limits should you have? While it will vary from state to state, I recommend having at least have $500,000 on your auto policy and a $1,000,000 umbrella policy as well. I know, you're probably thinking why on earth would I need $1.5 million worth of coverage?
The first reason is that depending on what state you live in, you may not be able to file bankruptcy on liability claims. What does this mean? This means that if you have $25,000 worth of liability on your auto and were to severely hurt someone causing $300,000 worth of damage, you would be on the hook for $275,000. They can take your car, house, checking and even garnish wages until the claim is paid off. You have to not only think about what you have to lose now but also all of the potential future earning that could be lost.
The second reason is that the average death claim is over $750,000 which means that even if you had $500,000 worth of liability on your auto, which is generally the most an auto policy offers, you could still be on the hook for a quarter of a million dollars.
With insurance, you do have to consider worst case scenarios because that is why we have insurance. By ignoring this fact and purchasing low limits because you're not willing to spend the equivalent of a trip out to dinner is only doing yourself a disservice.
4. Not informing your insurance company you have a new teen driver
If you are knowingly withholding drivers, it could result in the denial of a claim. You could be paying for insurance but because you did not disclose a driver because you didn't want to pay the extra premium, you might be on the hook for a claim in its entirety. Sometimes it is hard to stomach that extra $100 a month for that new driver, but I can guarantee you it would be much more difficult to stomach the repossession of your home if your child got into a serious accident and your company denied the claim because the household was rated inaccurately.
The national average annual rate increases for male teens, according to insuranceQuotes.com:
� 16 years old: 109.65 percent
� 17 years old: 99.12 percet
� 18 years old: 90.45 percent
� 19 years old: 69.08 percent
Rate increases for females are much lower than for their male counterparts:
� 16 years old: 81.63 percent
� 17 years old: 72.69 percent
� 18 years old: 64.81 percent
� 19 years old: 47.58 percent
Following is an interesting study that provides insight on when teenage drivers are most likely to be involved in a crash:
https://www.forbes.com/sites/tanyamohn/2011/10/18/teenage-drivers-a-new-study-provides-fresh-insights/#7b739d7569df
I believe the study is correct in that experience is key. In Nebraska, for example, you have to either log 50 hours with your parents or complete a certified drivers education course. For other states still issuing licenses without any requirements, this would be an effective way to require kids to have more experience before they are allowed to drive on their own. Especially without a cost burden to the state.
Article Source: http://EzineArticles.com/9842341
It is no secret that kids develop at different rates when growing up and it is no different for driving. While some kids are ready to drive younger than others (I was 14 when I started driving to school) it is definitely a conversation parents should have with their children. Some should wait to begin driving because they are simply not ready for the considerable responsibility. When you are driving, you are in control of an object that is extremely large and fast moving and can cause serious damage and even death.
2. Insuring your home and vehicles with two different agents
When you are shopping your insurance, in 99% of cases it is best to have everything with one company. When you have your policies with multiple different providers, you are most likely not getting the best rate. Almost every company out there gives you discounts for having everything bundled together with the most common being auto and home. As time has passed, companies are giving discounts for having policies in addition to just the auto and home. Many providers offer significant discounts for having multiple policies, such as life, business, umbrella, off-road, marine and even rental properties.
Outside of price, having one agent also will make your life a lot easier because you are not having to deal with two different people, which will generally lead to two answers for everything. Not all agents are created equal, so finding someone you can trust-who has the knowledge to help you with any questions you might have, as well as recommending what is best for you-is just as important (if not more important) than price.
3. Having a low liability coverage
One of the biggest mistakes you can make with your insurance is having low liability limits. In this day and age, lawsuits are more prevalent than ever and the payouts are only getting higher as medical costs are constantly going up. If medical costs have gone up 25 percent in the past five years, but you still have the same liability limits, you are now 25 percent more likely to have a claim exceed your liability cap.
There are a lot of assumptions when it comes to insurance, and one of them is that having high liability limits is going to cost an arm and a leg. In reality, that is the farthest from the truth. In many cases, you can double or triple your liability for less than a trip out to dinner each month. Is that meal really worth hundreds of thousands of coverage in the event of a liability claim? I don't think so.
So, what liability limits should you have? While it will vary from state to state, I recommend having at least have $500,000 on your auto policy and a $1,000,000 umbrella policy as well. I know, you're probably thinking why on earth would I need $1.5 million worth of coverage?
The first reason is that depending on what state you live in, you may not be able to file bankruptcy on liability claims. What does this mean? This means that if you have $25,000 worth of liability on your auto and were to severely hurt someone causing $300,000 worth of damage, you would be on the hook for $275,000. They can take your car, house, checking and even garnish wages until the claim is paid off. You have to not only think about what you have to lose now but also all of the potential future earning that could be lost.
The second reason is that the average death claim is over $750,000 which means that even if you had $500,000 worth of liability on your auto, which is generally the most an auto policy offers, you could still be on the hook for a quarter of a million dollars.
With insurance, you do have to consider worst case scenarios because that is why we have insurance. By ignoring this fact and purchasing low limits because you're not willing to spend the equivalent of a trip out to dinner is only doing yourself a disservice.
4. Not informing your insurance company you have a new teen driver
If you are knowingly withholding drivers, it could result in the denial of a claim. You could be paying for insurance but because you did not disclose a driver because you didn't want to pay the extra premium, you might be on the hook for a claim in its entirety. Sometimes it is hard to stomach that extra $100 a month for that new driver, but I can guarantee you it would be much more difficult to stomach the repossession of your home if your child got into a serious accident and your company denied the claim because the household was rated inaccurately.
The national average annual rate increases for male teens, according to insuranceQuotes.com:
� 16 years old: 109.65 percent
� 17 years old: 99.12 percet
� 18 years old: 90.45 percent
� 19 years old: 69.08 percent
Rate increases for females are much lower than for their male counterparts:
� 16 years old: 81.63 percent
� 17 years old: 72.69 percent
� 18 years old: 64.81 percent
� 19 years old: 47.58 percent
Following is an interesting study that provides insight on when teenage drivers are most likely to be involved in a crash:
https://www.forbes.com/sites/tanyamohn/2011/10/18/teenage-drivers-a-new-study-provides-fresh-insights/#7b739d7569df
I believe the study is correct in that experience is key. In Nebraska, for example, you have to either log 50 hours with your parents or complete a certified drivers education course. For other states still issuing licenses without any requirements, this would be an effective way to require kids to have more experience before they are allowed to drive on their own. Especially without a cost burden to the state.
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