When the Red and Blue Lights Flash

You studied and took driving courses and practiced a great many hours to prepare for your driving test.  You passed the written, driving and eye exam with flying colors and had your picture taken.  Your license is shiny and new, and you have every intention of obeying the law at all times.

            Congratulation is in order!  Not everyone can drive; it takes responsibility and a certain level of care that the D.M.V., your parents, and your insurer can all reward you for.  However, despite your best intentions, there may come a time when you are pulled over while driving.  Perhaps it isn’t due to a breach in the rules of the road; maybe the officer just wants to make sure you’ve got your seat belt on.  Knowing what to do and what to expect if pulled over can make the experience more pleasant for you and the officer.

            The most important thing to remember is that you should pull over in the safest place possible.  If there is a police car behind you, lights flashing and siren sounding, and you don’t feel safe pulling over where you are (for example if you’re on a busy highway with a breakdown lane that couldn’t accommodate a squirrel), the best thing to do is to put on your flashing lights (this button on your dashboard usually has a red triangle on it) to signal to the officer that you acknowledge their request and are seeking a safer location.  The officer might appreciate you not putting his or her life at risk.  Remember, he or she will be standing in the road next to your car to speak with you.

            Once safely pulled over, place your car into park and wait for the officer to approach your driver side window.  Gathering your license, registration and insurance cards might be a useful way to pass these moments, as the officer will ask for any or all of these documents.  The officer might bring your license and other documents back to his or her car to verify your information, and then will return to talk further with you.

            Stay calm.  The officer is doing his or her job, and would not have pulled you over without reason.  Typically he or she will inform you of the reason you’ve been pulled over early in the conversation.  The problem might be that your tail light flickered out and you’ve been pulled over to be informed that it needs fixing.

            Be honest.  If you have broken the law, it does little good to pretend that you haven’t.  If you were on your cell phone or driving eighty miles per hour on the highway, the officer will already know this, and though you may be nervous, honesty is the best policy.

            Be polite.  A polite and receptive attitude can go a long way.  Officers work hard and at times, dangerous jobs and are deserving of respect.  The golden rule also applies; he or she will treat you respectfully if you are polite and patient.

            Of course, the best rule to live by is to not break the law.  However, it does happen, and even if the law has not been broken, there may be other reasons to be pulled over.  Remembering that the police officer works to help improve and maintain order in society will help you to remain calm.

Stiff DMV Fines

There are potential situations when you might not be driving your car for extended periods of time.  Should you find yourself in this situation, do not neglect your auto insurance.  Expired insurance can lead to fines from the Department of Motor Vehicles, suspension of registration, citations, potential difficulty registering automobiles in the future and even higher insurance costs when you re-apply.

            When your insurance expires, or whenever you apply for a new policy, insurance companies are required by law to notify the DMV, who then verifies your vehicle’s registration.  If the DMV finds that your insurance has expired and your vehicle is still registered, they can ask that you either provide proof of current insurance or pay a fine.  Most insurance companies do not like to see lapses in your coverage either, and might surcharge your new policy depending on the length of the lapse.

            Consider the following example.  You own a truck and a convertible.  You drive the truck in the colder months to combat Connecticut winter driving conditions and the convertible in the summer so that you can enjoy the warm, sunny weather.  Fully insuring both cars at once might be too expensive.  If you are facing a daunting insurance premium, talk with your insurance agent.  Many companies offer an option to put one car on suspended use or withdrawn-from-use for a period of time (usually four to six months).  This allows you to pay for your liability insurance at a lower rate, as long as you do not drive said vehicle.  Usually insurance companies will ask for odometer readings both at the beginning and end of the suspended period.

            I once spoke with a customer whose car needed extensive repair, and he hadn’t been driving it for a few months, so he allowed his insurance to lapse without turning in his license plates to the DMV.  Unfortunately he was subject to a fine and some difficulty finding an insurer whose rates were comparable to those he’d previously paid.  Should you find yourself in this situation, you might be able to suspend your registration, or your insurance, in a manner that won’t subject you to the fines, citations and frustrations that can come from allowing your insurance policy to lapse.

 Information Source: http://www.dmv.org/ct-connecticut/car-insurance.php

What do those liability limits mean?

Learning to drive is part of becoming an adult.  When you get your driver’s license, you’re given permission by the state to operate a motor vehicle, which in many cases weighs a ton or more.  There’s a lot of responsibility there.  That responsibility requires you to purchase insurance, in case the unspeakable should happen: in case you’re in a car accident.  The state requires that you purchase insurance with minimum bodily injury liability limits of $20,000/$40,000 and a minimum property damage liability limit of $10,000.  You are also required to carry insurance that features a minimum uninsured bodily injury liability limit of $20,000/$40,000.  Understanding liability and how your selection of limits impacts your insurance premium and how claims will be handled is important; you don’t want to be underinsured.

            Let’s tackle that $20,000/$40,000 bodily injury limit first (sometimes noted on the declarations page of your policy as 20/40).  Picture a rainy night in late October.  There are wet leaves all over the road that are slick in between your tires and the asphalt.  You lose control of your vehicle and accidentally hit the sedan in front of you.  There are two people in that sedan.  Your insurance would offer up to $20,000 for each of those two people, for bodily injury, up to a maximum of $40,000.  Now suppose there are four people in that sedan.  Even though your liability limits state $20,000 per person, the insurance company is going to use the lesser of the two limits, so only a maximum of $40,000 will be paid, which divides out to $10,000 per person.

            Some companies offer combined single limits instead of the split limits described above.  In that case, you might see a policy with $300,000 CSL (combined single limit) for bodily injury liability.  That means that no matter how many people, that is the maximum that would be paid.  You should speak with your insurance agent and your parent or guardian to decide whether split limits or a combined limit is right for you.

            Property damage liability is what is paid if you hit someone’s car or other property, including state or town property (such as light poles or guard rails).  The state minimum for property damage liability is $10,000…which means that whether or not the car you hit is a Geo or a Mercedes Benz, the maximum liability paid will be $10,000 if you purchase the minimum.  You should apply careful consideration when choosing your property damage liability limit.  Just imagine if you slip on those same wet leaves, hit the Jaguar in front of you and then spin into a light post.  Electricity goes out for an entire block, for which you are responsible. 

            Uninsured motorist and underinsured motorist conversion liabilities are for your own protection.  Suppose someone hits you and drives away before the police arrive.  The phantom driver is never found…but you are not at fault.  Or, imagine someone hits you and they don’t have enough bodily injury liability to cover your injuries.  This is when uninsured and underinsured liability comes into play.  Often the limits for this liability match the bodily injury limits and many insurers will require you to sign a waiver if your uninsured liability limit is less than your bodily injury limit.  Think of it this way: why would you pay to offer others more protection than you would provide for yourself?  Also, this coverage is rarely expensive in comparison to bodily injury and property damage liability.

            You should always consult with your parent or guardian and your insurance agent if you are confused about what your liability limits should be, but ultimately, it is the choice of the policy holder.  Remember that insurance is meant to cover you when the worst catastrophes and accidents happen.  Insurance is meant to offer you peace of mind and security.  If you are uncomfortable with your coverage, that peace of mind is compromised.

Comprehensive and Collision Coverage- Which is which?

At some point before your driving experiences began you probably heard someone mention their “auto insurance deductible.”  This refers to collision and/or comprehensive coverage.  These coverage options are just that—optional, at least in the eyes of the state.  The state requires that you purchase liability insurance—how you choose to protect your own vehicle is up to you (unless it is leased, we will get to that shortly).  One can easily confuse the two coverage options so let’s take a moment to go over what each of them is for.

            Collision coverage is coverage for your vehicle in the event of an accident.  You hit a car, a fence, a sign post and damage some portion of your vehicle.  Collision coverage exists to help you handle the costs of repairs, less a deductible of course.  The deductible is the amount for which you’re willing to put yourself at risk, in other words, how much you will pay before the insurance company chips in.  Five hundred and one thousand dollar deductibles are the most common, but most companies offer other deductible options if neither of those are right for you.  Keep in mind that your deductible will influence your premium in an inverse relationship.  As your deductible decreases, your premium increases, and vice versa.  Adjusting your deductible is one way you can change your premium, but remember to keep your deductible within reason and not elect one that is more than you could afford if your car was damaged as a result of an at-fault accident.

            Comprehension coverage provides protection for your car in the event that something outside of your control damages your vehicle.  A tree falls on your car or a deer runs out in front of your vehicle as you’re driving.  You can have a deductible for this coverage as well, and, as with a collision deductible, the higher your comprehensive deductible, the lower your comprehensive coverage premium.  Comprehensive coverage has another feature: windshield glass coverage.  This is often listed as full glass coverage or waiver of deductible for glass, on your policy.  For a bit of added premium you can waive your deductible in the event you need to put in a glass claim.  Have you ever driven behind a large vehicle or truck and had something hit your windshield and chip it?  Or crack it?  If you have full glass coverage, you would not need to apply your deductible to the cost of replacing your windshield.

            Is your car ten years old or older?  You might consider opting out of these optional coverage selections to lower costs, for they usually make up a substantial portion of the premium.  Some insurance companies don’t offer these coverage options for cars over a certain age, but beware that opting out means you are not covered for such incidents as those described above. 

Cutting Insurance Costs Part 2: Your own policy vs. your parents’ policy

There’s no way around it: when you first start to drive, your household’s insurance cost will increase, whether you own your own car or share with a parent.  Each family must find the best way for itself to manage insurance, but it is important to be aware of the effects of purchasing your own policy or being added to your parents’ policy, presuming you’ll be driving your own car.

            Let’s look at how your household might be affected if you and your car are added onto your parents’ auto insurance policy.  The first bonus is the likelihood of a multi-car discount.  Your parents might already have this discount if both of their cars are on the same policy, but if you purchase your own policy and have one car, it is quite clear that you should not expect a multi-car discount.  Multiple-line discounts may also be available if, for example, all the autos and the home are insured through the same carrier.  Not all companies provide multiple types of policies, but those that do often offer discounts for purchasing more than one type of policy.  If your parent(s) or guardian(s) own or co-own your car or share their car with you, this may be something you might want to discuss with them. 

            Another reality, perhaps a harsh reality, is that until you reach your mid to late twenties, it can be difficult to have enough of a credit history to have a score and situation reflective of your financial responsibility.  Insurance companies do factor financial responsibility into rate calculation.  Financial responsibility can affect your rating tier, in other words, it can determine your placement in the insurance carrier’s rating system.  The more financially responsible an insured is, the lower the rate will likely be.  If you live at home with your parents or guardians, you might consider asking them to add you and your car onto their policy.

            Many insurance companies rate the household for auto insurance.  That means that if you live at home with your parents, once you start driving, they will have to list you as a driver on their policy anyway.  Why not participate in the aforementioned opportunities to lower your insurance costs?  You can still pay for your own insurance if that is the agreement you have with your parent(s) or guardian(s).

Cutting Insurance Costs Part 1: Discounts

Passing your driving test is an exciting event, but all too soon the costs of owning and running a vehicle can add up.  Fuel costs continue to rise; it seems not long ago a gallon of regular unleaded gasoline only cost $1.27, and that seemed like a lot!  Today per gallon cost has risen well above $3.00 in many parts of Connecticut.  Whether you purchase your car from dealership or privately, you can bank on a certain payment each month, or one large lump sum.  Every three months you’ve got to get your oil changed, not to mention tune ups and other maintenance procedures that become more necessary as your car ages.  Each year there are registration fees and taxes to pay, and a driver’s license in and of itself is not free.  Nor is insurance.

            Do not despair, there are ways to cut one’s driving costs.  Certain fees cannot be helped, such as registration, taxes and licensing fees.  You can drive around for miles searching for a gas station that is a few cents cheaper than the one down the street, but that becomes pointless; the distance driven does not usually compensate for the few pennies that can be pinched.  Maintenance and parts can be found sometimes for less money, but parts are parts and the cost rarely differs a great deal.  Labor fees are rarely negotiable.

            Where then, can money be saved?  How can you help your tired wallet?  Insurance for new and youthful drivers is often expensive because you have not yet had as much time behind the wheel as insurer’s may like.  There are a variety of discounts and programs that exist to help you cope with insurance costs.  Many insurers offer good student discounts.  If you can maintain a 3.0 GPA you might be eligible for this discount, and in most cases, all that is required for documentation is your most recent transcript or report card.  Many companies have new driver education programs that involve logging trips in your car (with an experienced driver, such as a parent or guardian) and watching a video about safe driving practices.  Some insurers have “teen contracts” that you can sign, and in promising to drive responsibly, you can earn a discount.

            You should speak to your insurance agent about possible discounts for youthful drivers.  It never hurts to ask, especially if it can save you a few bucks a month that might be enough for those concert tickets, or that new iPod you’ve been eyeing.