Can You Ever Have Too Much Insurance?

 

Some insurance is essential, but it's important to buy the right types of coverage and the proper amounts.  Some insurance is required by law like vehicle liability coverage, while some protection is required by a lender such as the mortgage lender for your home loan.

Life insurance, which isn't usually required by anybody but highly recommended for everybody who has others depending on their income has two ways of costing too much:

1. Buying a policy with a death benefit that's too large.  The purpose of most life insurance policies is to make sure that, if you suffer a premature death, your family will have enough money to maintain their previous standard of living after covering funeral costs, college tuition for the kids and outstanding loans like those for cars and your home mortgage.  The aim isn't to suddenly make your family wealthy upon your passing, but to maintain their lifestyle.
2. Buying insurance for longer than needed.  Once the kids are out on their own, your home loan is paid off and you've retired, living on retirement income, your life insurance needs will be much different than when you were young with a growing family.

At this point, keeping the same amount of coverage could constitute over insuring yourself.  Contact your Greensboro insurance agent to go over your current life insurance needs.

 Too Much Car Insurance

If you drive a car, you're required by state law to have at least a minimum amount of liability insurance.  When you look at the numbers, 30K/60K/25K, you'll see that these minimum amounts are significantly lower than what you'd need after having a serious "real-world" accident for which you're held legally responsible.  If you have only minimum required amount of liability car insurance, you're likely well underinsured.

If you continue to carry full comprehensive coverage on an older, low-value car, you could be wasting your money.  If you could easily replace the vehicle if it were to be stolen or wrecked, the amount of premium you pay compared to the amount of a settlement may not be that much different.  In that case, you're likely over insured.

Homeowners Coverage

Your Greensboro insurance agent is happy to review your coverages to ensure you're properly covered.  Review your homeowners policy every couple of years to ensure adequate protection.  Protection for your home's structure should cover the cost of rebuilding, not its market value.

How Do Car Insurance Companies Set Rates?

All types of insurance, including car insurance, involve a transfer of risk between two entities - the insured and the insurer.  As a car insurance policyholder, you're contracted with your insurer for them to underwrite a number of the risks posed by the ownership/operation of your vehicle.  The number of risks being underwritten will partially determine premium rates.  The greater the risks being underwritten, the greater the policy premium costs.

These risks protections may include:

• Liability coverage for bodily injury or death of a third person or persons (legally required coverage in NC)
• Liability coverage for property damage of a third person or persons (legally required coverage in NC) 
• Uninsured motorist coverage (legally required coverage in NC)
• The risk of collision
• The risk of a non-collision loss such as fire, theft, vandalism or severe weather damage
• Personal Injury Protection to help toward the medical costs of your own injuries, regardless of who is found to be at fault

Collision coverage is typically the most expensive portion of a car insurance policy, since the risk of a costly claims payout may be greatest in a serious collision deemed your fault.  This high cost can be reduced by increasing your deductible amount from, say $500 to $2000.  The amount of your policy deductibles is another factor affecting your final policy rate. 

Other Factors Affecting Car Insurance Rates

A broad range of data is used by car insurers to determine rates.  Some factors are more important than others but, taken together, they give underwriters a good idea of what kind of insurance risk you represent to their company.  Consider the following:

• A major rating factor, especially for young drivers, is policyholder age.  The most expensive rates are for teenagers and the least expensive are for those drivers in their 50s.  The reason is because teens have proven to be faster, more reckless and aggressive drivers.  Higher risks equal higher premium costs.
• Driving history - a history of moving violations and/or accident claims are a red flag and will cause higher costs.
• Location plays a role because certain zip codes show higher accident rates and higher risk of theft, vandalism, wildfires or floods.
• Gender - primarily affects young drivers.  Young males are more likely to drive recklessly than females.
• Mileage traveled - more miles driven means higher risk to your insurer.
• Age and value of your vehicle plays a role in rating your insurance.

 

What Does Rideshare Insurance Cover?

 

If you're interested in going to work for a rideshare company such as Uber or Lyft, you should take time to consult your current auto insurance agent to find if there's a rideshare endorsement available for your auto policy.  If you drive for a rideshare company without telling your insurance company and you have an incident for which you file a claim, that claim will likely be denied.  In addition, your auto coverage will probably be canceled.

Standard car coverage does not cover rideshare drivers and if you drive for a company like Uber or Lyft, you'll need to get a special rideshare insurance policy.  While these insurance companies do offer some coverage for their drivers, it's incomplete protection that doesn't cover the entire duration of your trip.

Rideshare Insurance From the Rideshare Company

Rideshare companies break down a rideshare trip into three parts, only two of which are covered by their  provided insurance.

1. Period 1 is when you're logged into your rideshare app and waiting for a ride request.  At this point, you're not being covered by your employer-provided insurance but, since actively on the app waiting for a ride request, you're technically on the clock and not being covered by your personal auto insurance either.
2. Period 2 is when you've received a ride request and are on your way to pick up a customer.  While you're covered by the rideshare company's insurance at this time, it's probably just limited liability coverage such as the minimum required by the state.  This is $50K per person per accident for bodily injury liability, $100K bodily injury liability for all persons per accident and $25K liability for property damage per accident.
3. Period 3 is the time during which you're transporting your passenger.  During Period 3, you have the same coverage as in Period 2.  Once your fare has been dropped off, you revert back to zero coverage as in Period 1. 

Purchasing Additional Coverage

As a rideshare driver you're not legally required to buy extra coverage to provide yourself with full protection but it's a good idea.  The gap that exists when you're not covered, which is when you're logged onto the rideshare app and waiting for a ride request, needs to be addressed.  If you're involved in an accident during this window, you're not covered by your rideshare company's commercial insurance policy or by your personal auto insurance coverage.

Do I Need Uninsured Motorist Coverage?

 

Although you probably carry vehicle insurance coverage as required in North Carolina, you may never expect to be in a car accident, although accidents happen every day here in the Triad Region of N.C.  What's worse than being in a car accident is being in an accident where the other driver is at fault and he or she doesn't have insurance.  This may surprise you: according to the Insurance Information Institute (III), nearly 10% of North Carolina's drivers are driving without vehicle insurance.  

Required By Law

In answer to the question of whether or not you need uninsured motorist coverage (UM), the answer is "YES."  UM is required of all drivers in NC in the same minimum amounts as liability protection, which is also required:

• $30,000 bodily injury protection for one person per accident
• $60,000 bodily injury protection for all persons per accident
• $25,000 property damage per accident

How Much Is Enough?

If you're carrying the mere minimum coverage for either UM or your liability protection, consider what the real costs would be if you were involved in a serious auto accident, your fault or not, $25K may be enough to cover the repairs or replacement of a single vehicle, but maybe not.  Medical costs have shot through the roof in the past few years, including hospital and doctor's costs, not to mention long-term costs for disabilities resulting from a car crash.  There's also lost wages to consider.

Experts suggest that when purchasing your liability coverage and your uninsured motorist coverage that you increase the benefit amounts to several times the minimums required.  Any costs not covered by your uninsured motorists benefits may likely have to come out of your own pocket, although you may be able to claim against your base policy if you have collision protection or medical benefits protection.

When Does Uninsured Motorist Insurance Pay?

Uninsured motorist insurance typically covers the following:

• An accident that's caused by an uninsured driver
• An accident caused by a driver whose insurer has gone bankrupt
• An accident caused by a motorist whose insurance company denies liability
• An accident caused by a driver driving an uninsured vehicle despite having insurance himself

Besides the fact that uninsured motorist and underinsured motorist coverages are required by North Carolina state law, it would still be an important coverage to have in light of the fact that NC has so many uninsured motorists.

Is the Bare Minimum Car Insurance Okay?

 

Buying a car can be an expensive prospect, especially when buying a new vehicle, and car payments are just the beginning.  There are also various fees that must be paid, such as the cost for getting the vehicle registered and, of course, the cost of insurance.

When buying your Greensboro car insurance, you'll learn that there are two classifications:

1. Car insurance required by North Carolina law for all vehicles operated on public roads
2. Optional car insurance not required by law but recommended for your protection

Insurance Required By Law

All but a couple of U.S. states mandate a certain amount of car insurance for drivers.  Each state has their own requirements regarding types and minimum amounts of coverage required, but the main focus is for bodily injury liability and property damage liability coverages.  Some states also require protection against uninsured drivers and for Personal Injury Protection (PIP) insurance.

In North Carolina, the legal requirement  is for a minimum of $30,000 per person bodily injury liability protection per accident, $60,000 for all persons in bodily injury liability protection per accident and $25,000 in liability coverage for property damage.  You're also required to have the same dollar amounts ($30K/$60K/$25K) in uninsured/underinsured motorist coverage.

Why Carrying Bare Minimum Car Insurance Is a Bad Idea

Required liability coverage is meant for "the other guy" involved in an accident that you cause.  The money paid out goes to help pay towards injuries and/or property damage sustained as a result of your driving errors.  There are two major problems to consider regarding this "bare minimum" coverage.

1. Your Greensboro car insurance liability coverage does nothing to pay for your injuries or property damage.  To be protected for your own losses in an accident you've caused, you must add certain optional coverage to your insurance policy such as collision coverage, personal injury protection (PIP) or medical  payments coverage.
2. The bodily injury and property damage liability amounts required by law are extremely low compared to actual costs typically seen as a result of an auto accident claim.  If an accident you cause seriously injures a third party and they require significant medical services, charges can amount to tens or hundreds of thousands of dollars.  Multiply this by the number of passengers injured from the other car and you can see how woefully inadequate "bare minimum" coverage is.  Experts suggest you should carry five or ten times the minimum required.

Is Your Teen Really Ready to Drive? 4 Considerations

 

When your youngster is a teenager and wants to drive, it's important that they understand an important concept.  While driving may be a teen's rite of passage, it shouldn't be considered a right, but rather a privilege, which must be earned.  As a parent, what you want to ask yourself is, at their current stage of development, is your teen ready to take on the responsibility involved with driving.

While age is a primary factor in determining who can drive, it's by no means the only factor.  It doesn't matter if your son or daughter is old enough to drive legally if they're not mature enough and responsible enough to handle what's required to drive a large motorized vehicle capable of causing death and destruction in the wrong hands.

Teen years can be a very challenging time in many ways, including:

• Learning to deal with emotional stress
• Academic stress
• Peer pressure
• Problems with parents

Some teens may be capable of handling the responsibility of driving at age 15, while others may be lacking in necessary judgement even at age 18 and beyond.  As the parent, this is on you to determine, keeping in mind that one of your prime duties is to keep your child safe from harm.

North Carolina Teen Drivers

The State of NC has one of the safest and most comprehensive licensing systems for teen drivers of any state.  It's a three-level graduated system that allows teens aged 15 to get a learner's permit after fulfilling several requirements.  See those requirements here.  Then the teen works his or her way up toward receiving a full provisional license.

Considerations to Help Determine Your Teen's Readiness To Drive

1. Does your teen consciously know what's going on around him and act/react accordingly?  Does he have good peripheral vision and the ability to predict the behavior of others?
2. Driving competency must include the ability to be alert and tuned into one's own surroundings; to be a defensive driver, immediately reacting to all situations involving other drivers' behaviors.
3. How well does your teen follow rules and regulations?  Do they respect authority and keep their word?  A teen who defies authority and can't follow rules might not be ready to take on the responsibility of driving.
4. Does your teen have good manners and a good general attitude?

Car Insurance Trackers: What Data is Tracked?

 

Many vehicle insurance companies are now offering policy price discounts for clients who volunteer to equip their car or truck with an insurance tracking system.  Historically, car insurance companies have relied on various demographic information in order to determine the likelihood of a policy applicant making future claims.  This began with the creation of tables, known as actuarial tables, notating the number of vehicle accidents by location, by driver's gender, age, type of vehicle and more.

Then, when you were applying for insurance coverage, your personal driving history, including driving infractions and any past claims, were added to those statistics.  Driving history proved to be a good indicator of future potential claims.

While these actuarial tables remain an important part of your car insurance underwriting, determining whether or not to sell you a policy and at what premium rate, car insurance trackers add another level of accuracy to this process.

What is a Car Insurance Tracker?

Car insurance trackers were first introduced in the U.S. by Progressive Insurance Company in 1998.  Progressive's program, called Snapshot, is what's known as usage-based insurance.  It personalizes your car insurance premium rate based on the way you actually use your vehicle.  You pay according to the data collected by your tracker, which is sent to your insurer and analyzed to determine your driving habits.

Many auto insurance companies offer usage-based programs.  Most provide an immediate discount to your policy cost simply for signing up to participate in the program.  You then get a personalized premium rate at renewal time, depending on the results of the analysis of your driving habits.  While there's the potential that your premium rate may increase if it's found that your driving behavior shows increased risk, most drivers experience lower policy costs at renewal time.

What Data is Tracked?

There are two ways for data to be tracked: one is with a dongle that plugs into your car's computer via the OBD-II port and the other is through an app loaded onto your smartphone.  Once collected, the data is sent wirelessly to your insurance company for analysis.

Insurers are interested in information that indicates your typical driving habits, particularly those that show risk of potential claims.  Data collected by the tracker system may include:

• Hard acceleration
• Hard braking
• Speeds driven
• Fast cornering
• Use of handheld device while driving
• How often you drive, for how long and what time of day

How Do Car Insurance Tracking Devices Work?

 

Car insurance tracking devices are a great piece of technology, not only for drivers who use them but for companies that insure those drivers.  Also known as "telematics," vehicle tracking devices have been popular with many insurance companies since the late 1990's, with Progressive Insurance Company pioneering efforts in the U.S. to get these devices used in cars driven by their auto insurance policyholders.

What are the Benefits?

For insurers, the benefits of having tracking devices operating in their policyholders' vehicles include:

• Letting the insurance company know how safe of a driver you are by collecting data on such things as harding braking, fast acceleration, aggressive cornering and speeds driven.
• Letting the insurer know how much you drive, what times of day your car is being used, where it's being parked overnight and whether you're using your cell phone while driving.

All of the above-listed data give a picture of your driving habits and your likelihood of engaging in behavior that may cause you to be prone to be involved in an accident.

Benefits to you as a driver with telematics operating in a vehicle include the collection of data that can potentially help you to become a safer driver.  Learning how to overcome your tendency for fast acceleration and other forms of aggressive driving can help save you money not only on your insurance policy premium costs but also your fuel usage.

How it Works

There are two types of auto insurance trackers.  One is a dongle that plugs into your vehicle's On-Board Diagnostics II (OBD-II) Port, which is where your mechanic accesses data from your vehicle's on-board computer.  The other method for activating an on-board tracker is to load a special app onto your smartphone, which you must then carry in your car when driving.  The data collected by these two tracking methods is then sent to your insurance company where it can be analyzed.  Many insurance companies will give you an immediate discount on your policy premium cost when you sign up for their auto-tracking program.  Others will wait a predetermined amount of time to analyze your driving habits before deciding whether to offer you a discount and for how much.

Some Additional Benefits

Additional features some trackers provide include contacting emergency services in the event of a collision even if, as the driver, you're unresponsive.  They can also send roadside assistance if your car breaks down.

Buying a Car Online: Pros and Cons

 

With the Covid-19 pandemic closing in on the two-year mark, never has online buying been more popular.  This applies to goods that have always been popular to purchase online such as restaurant meals, jewelry, clothing and books, but also more unusual purchases like buying a car online.  Shopping for car insurance online has been popular for some time now, and in fact, it's estimated that more than 70% of those buying car insurance last year began by going online to do some research.

What's really surprising is that, according to J.D. Power, about 2/3 of consumers buying new cars do their shopping online.  The Internet is an incredibly useful tool for those doing their "due diligence" by researching products before putting their money down, especially with higher-priced items.  Keep in mind that there's a difference between shopping online and buying online.  Shopping for a car online includes:

• Researching a particular model car
• Finding cars that are listed for sale
• Comparing different models of cars
• Calculating car loan rates and payments
• Determining what their current vehicle is worth
• Obtaining car dealer information

You may also utilize social media in your search for buying a car by chatting on dealer websites and even negotiating with dealers.

Pros and Cons of Buying a Car Online

Deciding whether or not to buy a car online will depend on just what you're looking for in a car-buying transaction.  Buying online can be fast, convenient and without the hassle of having to deal with a car salesman.  But if you're the type of person who wants to see, touch and smell your potential vehicle while taking it out on a test drive, then an online purchase might not be right for you.  Here are some of the pros for online car purchasing:

• Streamlines the process, saving time from the traditional in-dealership experience
• Offers a car deal with no negotiations, no haggling and no sales pressure,
• Shop at your convenience.
• Take delivery at home or anywhere else you choose.

Here are some cons:

• Inability to inspect (see and feel) the car you're buying.
• Less chance of taking a test drive.
• Less ability to negotiate a price.
• May restrict your financing options.
• Getting a fair price for your trade-in may be difficult.

Whatever you decide, know that thousands of people are successfully buying cars online today and the trend only seems to be getting more popular.

Using Risk Analysis to Understand Coverage Needs

 

Risk analysis, which is the process of assessing the probability of an adverse event occurring, can be invaluable in helping determine your specific insurance coverage needs.  The entire insurance industry revolves around the reality that risk is an unavoidable factor in everyone's life.  By buying insurance coverage, whether it's life insurance, auto insurance, home insurance, liability insurance or any other insurance coverage, you're sharing the risk of accidental financial loss in your life with your insurer.

Risk analysis involves the study of the uncertainty that risk plays in your life.  If you drive a car, you run the risk of being involved in a collision, of injuring a third party or causing property damage, of having your car stolen or vandalized or of having a tree fall on it and crushing it.  There is insurance to help protect you from the financial loss that any of these risk factors may cause you if realized.  If you drink before driving, regularly break the speed limit or use your cell phone while driving, your risk of suffering an accidental loss skyrockets.  Conducting a comprehensive risk assessment will uncover the dangers you face.

The Risk Assessment Process...Also Known as Underwriting

When you apply for an insurance policy, whether for your car, your home, your life, or anything else, the insurance company goes through the process of underwriting, also called risk analysis or risk assessment.  They do this to determine the likelihood of whether offering you insurance coverage appears to be a good investment on their part.  If a policy is offered, risk assessment also helps determine the amount of premium you should be charged for your coverage. 

The process of risk assessment begins with identifying any hazards that could potentially cause harm.  For home insurance, a home inspection is typically conducted to uncover any risks or hazards that could lead to the homeowner later submitting a claim.  For car insurance, a check is made of your driving history to uncover any factors such as speeding tickets or DUIs that could indicate behavior that could lead to future accidents.  For life insurance, your family health history is looked at, as well as unhealthy habits such as cigarette smoking.

You can use the information uncovered by these assessments to do your own personal risk analysis to determine changes you need to make to help alleviate or reduce these risks.  Lower risks mean increased security.

Auto Insurance and Teen Driving Lessons

 

In North Carolina, teen drivers between the ages of 15-17 are required to go through a process called "graduated licensing" before being allowed to receive full driving privileges.  This process has strict requirements for teens as they gain the on-the-road experience needed to drive a vehicle with minimal restrictions and no supervision.

Eligibility requires that a teen driver: 

• Be at least 15 years old
• Has received a Driving Eligibility Certificate
• Has completed a state-approved driver education course

Driving Eligibility Certificate

Students completing their high school requirements will be issued a Driver Eligibility Certificate by their school.  They must be between the ages of 15 and 17 and currently enrolled in school and be making progress toward achieving either a high school diploma or GED.

Driver Education Courses

Teens 14-1/2 years old or older and progressing toward a high school diploma or GED may enroll in an approved driver education course.  These are provided through North Carolina high schools.  

Driver education courses consist of:

• 30 hours of classroom instruction
• An eye test
• Six hours of behind-the-wheel training on the road 

Upon completion, a Driver's Education Certificate is awarded, which is part of the requirement for obtaining a learner permit, step one in the graduated licensing process.  Click here to see descriptions of all three levels of the graduated licensing process.

Driving Lessons

Driving lessons extend throughout the North Carolina teen graduated licensing process.  They start while qualifying for step one, obtaining the Limited Learner Permit, while completing the driver education 30 hours of classroom instruction and six hours of behind-the-wheel training.

Driving lessons continue during the 12-month learner permit period and an approved adult driver is required to be in the passenger seat during all drive times.  A minimum amount of 60 hours driving time, certified by a supervising driver, is required before moving onto step two of the process, Limited Provisional License.

Teens driving their parents' vehicle during the 12-month learner permit period are automatically covered under their parents' auto insurance.  Once the Limited Provisional License is obtained, the teen driver must be added to the parents' auto insurance or a separate policy taken out.  Offspring of insured drivers may stay on the parents' auto insurance policy as long as they reside in the same home or are away at school.  This is often a less expensive option than getting their own policy.  Parents should expect premiums to rise significantly.

How to Choose Your Auto Insurance Deductible

 

There are numerous ways available for saving money on your auto insurance coverage, many of which can be seen here.  The last item on the list, "raise your deductibles," is one that many policyholders consider doing first because it's simple to do and the results show up almost immediately.  The question is, what amount should your deductible be?

The Purpose of Your Auto Insurance Deductible

Vehicle insurance, like virtually all other insurance, is based on the sharing of risk.  When you take out an auto insurance policy, the insurer underwriting the policy is taking on a portion of the risk to which you're subject by owning and driving a vehicle.  If you suffer a covered loss, the insurer is responsible for compensating you for an agreed upon portion of that loss.  

The deductible associated with your policy is the amount you agree to pay toward the loss before your insurer pays their portion of the claim.  This deductible represents the amount of risk for which you retain responsibility in the event you suffer any loss covered by the policy.  The larger the deductible, the greater your risk of personal financial loss when a claim is made and the lower the insurer's financial risk.  Because of this, a lower deductible typically means a higher premium and choosing a higher deductible will mean a lower premium.

Choosing Your Auto Insurance Deductible

Choosing your auto insurance deductible is done when you take out your policy but can be changed, if desired, while the coverage is in force.  The average amount most people select for their deductible is $500, although some policyholders may opt for an amount as low as $100.  Upper limits can be in the thousands, especially when insuring a very valuable vehicle.

Since a lower deductible means higher premiums, you may opt for a higher deductible such as $1000 or $2000 in order to save money on your policy premium costs.  Contact your agent to learn how much you can save.  There is no deductible required for the liability portion of your coverage and you may choose to carry different amounts on your collision coverage and your comprehensive coverage.

Though you may save money when selecting a higher premium, any claim you submit will require you to come up with more out-of-pocket money.  You should have an emergency fund allowing payment of your deductible in the event of a covered loss.

Can You Ever Have Too Much Insurance?

 

If you've ever caught yourself thinking "I'm insurance poor," it's likely because you've been adding up all those policies you've managed to collect and all those premiums you continue to pay.  If you're like most people, you have life insurance, car insurance, health insurance, homeowners or renters insurance and maybe more.  The question is, can you ever have too much insurance?

Vehicle Insurance

In the state of North Carolina, anyone driving a vehicle on public roads is required by law to have at least a minimum amount of liability insurance.  This is third-party liability coverage to help pay for financial losses suffered by others in an accident you cause.  Losses may be the result of property damage, bodily injury or death.  In NC, the minimum liability coverage required is:

• $30,000 per person per accident bodily injury
• $60,000 per accident bodily injury coverage for all persons
• $25,000 per accident property damage

How Much is Enough

Many experts recommend you increase your liability limits three to five times the minimums (or more).  The amount you carry should depend upon the number of assets you stand to lose if sued for liability.  Even more protection is available through the purchase of a high-value umbrella policy.  This is a relatively inexpensive way to significantly increase your asset protection.

Other car insurance options should depend on the value/condition of the insured vehicle.  If you're driving an older, beater car that you could easily replace, carrying collision and comprehensive coverage on it probably doesn't make sense.  The money you're spending on these coverages might be better applied to medical payments or uninsured driver's coverage.

Life Insurance

You buy life insurance to keep your dependents financially secure in case you die unexpectedly.  The death benefit should cover: 

• Your income
• Major debts
• Funeral expenses
• Future obligations such as your children's education

As you age, however, you likely don't need the coverage you once needed.  Your home mortgage may be paid off, the kids are grown and off on their own and your debts are what they once were.  In this case, you can lower your coverage to a more appropriate amount. 

Homeowners Insurance 

Your homeowners coverage should be enough to rebuild your home and replace your property should the home be totally destroyed.  This doesn't mean covering the market value of the home or the value of the land.  Umbrella coverage can extend your homeowners liability limit.

How To Choose an Insurance Company

 

Buying insurance can be a potentially overwhelming experience due to the vast number of confusing definitions, conditions, exclusions and coverages involved.  On top of this, you want to choose an insurance company that's well-regarded in the industry, financially strong, with a good claims history and top reviews from clients with whom they've done business.  Here's a breakdown of several factors to consider when you're trying to choose an insurance company:

• Understand the difference between an independent insurance agent or broker and an insurance company agent.  An independent agent likely has access to policies from numerous different insurance providers.  While an insurance company agent can only write policies from his or her own company, the independent agent can write whatever policy is best suited to your particular insurance needs.  To make matters even simpler, an independent will do the research and legwork to find the best choices and then provide you with multiple options to consider.
• When considering a particular insurer, research their history and look into their reputation.  How long have they been in business?  What products do they offer and in what states are they sold?  What can be said about their company leadership and community involvement?  What are their professed vision and values?
• Assess the financial strength of a company you're considering and don't accept any insurance offer from a firm with less than an "A" (excellent) rating.  A.M. Best is the #1 independent insurance company rating-company in the U.S., but you can find several others here.
• Choose an insurance company that sells the type of insurance coverage you need.  Many companies give discounts for customers who carry multiple policies (e.g., homeowners, life, vehicle) with them, so check into this.  Check for all other discounts.
• While price is an important consideration for most people when they choose an insurance company, it shouldn't be the only consideration.  A lower price may mean a lower level of coverage, so always compare apples to apples.  Keep in mind the old axiom that you get what you pay for.  There may be a number of reasons for the price differences between different companies.  One may be because the lower priced is new to the market, which may mean it's lacking in experience.

Get with a trusted broker and explore the companies and coverages available.  Seek professional guidance and utilize their ability to uncover the best protection at the fairest price available.

Car Insurance: Teen Driver Discounts

 

As the parent of a teenage driver, you're not only becoming aware of how quickly your son or daughter is growing up to be an adult but also seeing the looming cost involved with teen driver insurance.  Fortunately, help is available.  Read on to learn about teen driver discounts and other ways to save money when insuring your teen driver.

Why Teens Are So Expensive to Insure

The reason teen drivers are more expensive to insure than drivers 25 years and older is because they represent a higher claims risk to insurers.  This may be due to:

• Their inexperience
• Their likelihood to speed, drive after drinking and not use seatbelts, causing them to have more accidents and submit more claims

Money-Saving Teen Driver Insurance Tips

Consider these teen driver insurance tips:

• As with the purchase of any insurance, experts agree that the number one rule before buying is to shop around.  Best advice is to obtain at least three price quotes from different providers.  The easiest way to do this is to utilize the services of a quality insurance broker with access to numerous different insurance companies.  They'll do the legwork and then present you with a number of options for the coverage best suited to your particular needs.  In this case, you'll want quotes from companies that specialize in teen driver's insurance
• While adding a teen driver to your existing car insurance coverage will add significantly to your current coverage costs, it's still less expensive than having your teen obtain their own, separate policy.  Having your teen complete a safe teen driving program or other defensive driving course can help lower the cost of your insurance policy
• Other valuable teen driver discounts offered by many vehicle insurance companies include a good student discount for students maintaining a "B" average (3.0 GPA) or higher at school.  This particular discount can often mean 10-15% off of coverage costs.  Add to this a distant student discount and a low mileage discount

The Advantage of Telematics

Some insurers offer installation of a small telematics device into your teen's car so you can monitor their driving behavior.  Positive results of driving habits may bring a driving insurance discount.  A telematics device can keep track of number of miles driven, speeds driven, times driven and number of hard brake applications.  Knowing they're being monitored in itself may prove to make your teen a safe driver.

How to Know If You Are Underinsured

 

You buy insurance primarily for the purpose of protecting yourself and your family against certain losses from which you would otherwise be helpless to handle financially.  For example:

• Life insurance protects the financial future of the loved ones that depend on your income, so their standard of living can continue at a similar level in the event of your untimely death.
• Auto insurance protects you from losses associated with liability suits if you're held responsible for causing injury, death or property damage to a third-party with your vehicle.  You can also insure against damage or destruction to your vehicle, personal injuries and more.
• Homeowner's insurance provides a long list of protections for what is likely to be your most valuable asset, your home.  If your home is damages or destroyed as a result of any of the perils listed within you insurance policy, the insurer is responsible for helping you deal with the financial costs.

Life Insurance 

Since life insurance is meant to help replace your income should you die prematurely, you're underinsured if the death benefit of your policy falls short of taking care of such things as:

• The income your now provide
• Debts/financial liabilities your have incurred, including your home mortgage
• End of life expenses
• Higher education expenses for your children

Auto Insurance

Almost every state requires a minimum amount of liability coverage for every vehicle driven on public roads but these minimums are woefully inadequate.  In North Carolina, for example, you're required to have liability insurance of $30K per person (bodily injury),  $60K per accident (bodily injury) and $25K for damage to a third-party's property.

An accident for which you're held liable could incur costs many times these minimum amounts and any amount above your policy limits would fall directly to you for payment.  One serious accident could ruin you financially for life.  Unless your auto liability coverage is many times higher than the minimum required, you are underinsured.  For best coverage, look into purchasing an umbrella policy.

Homeowner's Insurance

The worst case scenario for the company insuring your home is if it becomes totally destroyed by something like a house fire or a tornado.  If your insurance policy would pay 90% or less of the cost to completely rebuild your home, you are underinsured.  This includes using the same or similar materials and replacing everything in your home.  Homeowner's coverage should be rechecked every year or two.

What Drives Auto Insurance Rates Up?

 

Many of our clients are noticing that their Greensboro auto insurance rates continue to increase year over year and they're wondering why.  There are a number of answers to this question and they can be divided into two sections:

1.  Rate increases affecting everyone
2.  Rate increases specifically affecting you

Everyone's Coverage Rates Going Up

The auto insurance business is highly competitive and many auto insurance companies are struggling to stay profitable in these days of unusually high claims payments.  This has caused insurance rates to spiral upwards during the past several years.  This affects your Greensboro auto insurance rates as well as rates with companies all across the country.

Like any other business, an auto insurance company must stay profitable in order to remain in business.  They make money in two ways:  by collecting premium dollars from their policyholders and by putting these collected funds into profitable investments.  These funds are then used to pay out claims and to cover employee salaries and other administrative costs.  When claims payments going out surpass premiums coming in, a phenomena that's known as underwriting loss, premium costs must be increased in order to make ends meet.   There are some definite reasons why claims have risen so much recently.  Consider this:  

In the past several years, eight out of the ten largest auto insurance companies in the U.S. have reported losing money in their policy underwriting efforts.  In other words, they've paid out more in claims than they've collected in premiums.  Reasons for this include:

• A record number of disasters occurred in 2018-2019, including wildfires, hurricanes, floods and more.  These disasters not only negatively affected home insurance companies but also those companies insuring automobiles.  An inordinate number of claims were made on vehicles that burned, suffered flood damage or were damaged in tornadoes.
• An increase in distracted-driving accidents, mostly attributed to cell phone use, have been occurring lately.  Millions of crashes are blamed on distracted driving, causing insurers to raise rates.
• Expensive technology added to newer vehicles have made repairs more costly.  What used to be a simple rear bumper repair, for example, now includes repair of rearview video cameras, now required on all new cars sold in the U.S.

Rate increases affecting you individually may result from:

• Too many claims filed
• Adding a teen driver to your policy
• Moving to a higher crime/higher accident-prone area
• Too many moving violations
• You've turned 70 years old

How to Be a Better Driver: 11 Tips

 

There are dozens of ways that you can become a better driver - some more important than others - but all designed to help you and others on the road to stay safer.

While getting a driver's license can provide you with a great deal of freedom, it also brings with it a great deal of responsibility.  What starts with getting properly licensed and making sure the vehicle you're driving is properly insured according to the law, continues on to following the legal rules of the road (traffic laws) and observing common courtesy for your fellow drivers and pedestrians.

11 Tips

Here are a handful of tips for becoming a better driver.  They're not in particular order of importance, but each is a piece to the puzzle of becoming a better, safer driver:

1. Start by knowing your vehicle.  Read the owner's manual.  Learn how your car operates in the rain and snow (if you have snow where you drive).  Take your car to a safe place and practice various braking methods.
2. Don't get behind the wheel if you've been drinking or using drugs.  Call a cab or ride-sharing service.
3. Stay calm when driving, even if the guy behind you is honking his horn or yelling at you out his window.  Let him go by and forget about it.
4. Maintain a safe distance between your vehicle and the one in front of you, appropriate for your speed, the weather, time of day and driving conditions.
5. Watch ahead, not just the car in front of you but several cars ahead, so you can prepare for the unexpected.
6. Always obey traffic signs and signals and use your turn indicators when turning or changing lanes on the highway.
7. While it's recommended to drive at or below the posted speed limit, you want to go with the flow at highway speeds, even if it means going slightly faster than the posted limit.
8. Pay attention to the road.  Don't use cell phones or eat/drink while driving.
9. On long trips take a break every 90 minutes or so.  Don't drive when you're tired or sleepy.
10. Always yield to pedestrians.  They have the right of way.
11. Stay out of the blind spots of large trucks.  If you can't see the driver in his side mirror, he can't see you.

These are just some of the tips you can consider for being a better driver.  You can read more here.

4 Insurance Planning Tips for Difficult Times

Auto insurance companies have recently come under pressure to refund policyholder premiums charged based on out-of-date estimated miles driven data. Since many drivers have significantly curtailed their normal driving habits during the coronavirus crisis by not traveling, miles driven have gone way down. The good news is two fold.  1. Vehicle accidents have also gone way down.  2. Many companies are now refunding some premium dollars to consumers. 

Stay Home, Stay Safe and Stay Productive

With approximately 90% of the U.S. population under some form of lockdown order due to the novel coronavirus pandemic, “flattening the curve” has been shown to be possible through diligent limitation of social interactions and staying at home except when needing to leave to procure essential materials such as food or medicine.

With plenty of hours available during your days at home, we recommend you take some time revisiting your insurance portfolio to ensure your coverage is still what you need. Here at Tom Needham Insurance Agency we're open for business, working from home and at the office by appointment. We're happy to offer some insurance planning tips to help square away your portfolio and maybe even save a little money at the same time.

Insurance Planning Tips

1. It's recommended you re-shop for your car insurance every so often. Car insurance companies change their rates all the time and you should regularly check for lower prices.
2. Reexamine your life insurance needs – that 30-year term policy you bought 20 years ago may no longer be appropriate to your current needs. You may choose to lower your policy amount and save some money on your monthly premiums.
3. Ask about homeowner's discounts – just like good drivers can qualify for auto insurance discounts, good homeowners can sometimes qualify for good homeowner's discounts. These may be available for deadbolts, burglar alarms, sprinkler systems and more.
4. Bundle Your Policies – Tom Needham Insurance has access to numerous companies, some of the best in the business, and we'll work to find you the best deals available. Bringing your various policies such as homeowner's, auto and life under the umbrella of a high quality single insurance provider can save you as much as 15% or more on your premium costs.

Car Insurance Costs: How Much Does Age/Experience Matter?

Of the dozens of different factors used to determine your Greensboro car insurance costs, age/experience is primary. To an insurance company, the age of a driver represents general measures of both driving experience and accident risk.

Insurance company statistics show that, on average, the more years a driver has had behind the wheel, the less likely they are to have an accident and make a claim on their car insurance policy. According to the Insurance Institute for Highway Safety (IIHS), teen drivers (ages 16-19) have crash rates of four times that of drivers 20 years and older. Since insurers believe that young drivers are more likely to have accidents and make claims, teens' insurance rates are going to be more expensive.

What Adds to Higher Teens' Risk

Teen drivers are considered higher risks by insurance companies for a number of reasons. Their immaturity can lead to risky behaviors, such as speeding, and being inexperienced at driving makes them less likely to respond well in hazardous situations. Alcohol also plays a role in many teen crashes. While they may be less likely than adults to drink and drive, their accident rate is higher when they do drink and drive because of their relative inexperience with both driving and drinking.

Age Matters, Both Young and Old

This risk assessment continues on for a certain number of years. Assuming one is licensed at 16 years old, by the age of 25, you'll see your Greensboro car insurance costs drop significantly, to where they're only about one-third of what they were when you were 16-17. They'll continue to drop until you're about age 55, at which point they'll typically be as low as they can go. Drivers in their mid-30's to late 50's represent the lowest driving risk to insurers due to their greater road maturity and driving skills.

Typically, once you enter into your 60's, your insurance rates will again begin to climb. Aging brings with it slower reflexes and reaction times, which pushes seniors into a higher risk category in the eyes of insurers.

Saving on Your Insurance as a Younger Driver

There's nothing you can do to add years of experience to save on insurance premiums but there are some things that can be done to lower your insurance costs. Being added to your parents' policy, if they're willing, may cost half as much as taking out a policy on your own. Also, apply for all discounts available.