Why Teen Drivers are So Expensive to Insure

If you've ever had to add a teenage driver to your insurance policy, you know that it's not cheap.  A Quadrant Information Services study commissioned by InsuranceQuotes.com found that the average annual premium increase for adding a driver between the ages of 16-19 was 80%.  And in several states it doubled.  For Minnesota the average increase was 83.75% and for Wisconsin it was 69.37%.

Why So Much?

As much as we think our young adults may be cautious and responsible, they just don't have the knowledge and experience that some of us older drivers have.  Young drivers are more prone to mistakes, distracted driving and accidents.


According to the Insurance Institute for Highway Safety, "teen drivers have crash rates 3 times those of drivers 20 and older per mile driven."  So even though they drive less, they crash more often.

With the emergence of cell phones and texting, distracted driving has become a major problem for all drivers.  But it seems to be an especially bad influence on teen drivers.

Driving with other teenagers in the vehicle is also a big distraction.  Add in underage drinking and you've got a recipe for disaster and thus higher insurance costs.

How Can We Make Our Teens Safer?  

Many states have already taken steps to lessen the impact and danger for teen drivers.  In Minnesota, the OTS  prohibits driving between midnight and 5am and limits the numbers of passengers under age 20 in the first 6 months of licensure, with exceptions.  And it is illegal for drivers under the age of 18 to use a cell phone while driving except in an emergency.

Educating our new drivers is very important.  The parents' responsibility does not end after your son/daughter gets their license.  Other suggestions to make are:

• Buckle-up
  
• Don't speed
• Practice driving with your new drivers
• Talk about peer pressure and how to get out of different scenarios that may arise
• Make yourself available in unsafe or sticky situations
• Place your own limits on cell phones, passengers and the radio
• Consider installing monitoring devices in your vehicles

Saving Money on Insurance

In a perfect world, the best way to minimize your insurance expense is to do your best to make sure your teen driver doesn't get into an accident or get any tickets.  But in reality, teens are not perfect.

Talk to your insurance agent about possible discounts.  Many insurance companies offer discounts for good students and for students attending school away from home - especially if they don't have a car with them.

I hope this helps with your new drivers.  Please "Like" my Facebook page for more insurance tips, news and contests.

Home Improvements with Great Return in Value

The real estate season is upon us.  So what better time to discuss the most cost effective home improvements to increase your home's value.  Especially if you're in the market to sell.

Bathrooms and kitchens are typically the most popular areas to remodel.  But they can also be very expensive, which can bite into your Return on Investment (ROI). New paint and carpet can also be easy, inexpensive ways to spruce up your home for a buyer.

But according to Remodeling Magazine, there are better home improvements when it comes to maximizing your ROI.  


Top 5 Remodeling Projects by ROI

1. Replace the Front Door with a new Steel Door - 96.9%
2. Add a new Wood Deck - 87.4%
3. Replace older siding with new fiber-cement siding - 87%
4. Build an attic bedroom - 84.3%
5. Replace an older garage door with a new garage door - 83.7%

If you're making home improvement solely for the purpose of increasing your home's resale value, make sure you are working with a real estate agent that knows your market and a contractor that you can trust to get the work done well and stick to your budget.  And of course, make sure you inform your insurance agent of any improvements that could increase the reconstruction value of your home.  Whether you sell your home or not, you don't want to be under-insured.

What other cost-effective suggestions do you have for increasing your home's market value?

A Guide to Safe Winter Driving

With our first real snowfall of the year on the ground it's official...winter is here!  After last year's long cold season, we should be used to driving in the snow, right?  But we could all use a refresher course in preparing for, and driving on, our icy, slippery roads.  Here are a few things to help you survive the season as a good winter driver.

Winterize your Car - Before even thinking about going out on those snowy roads, make sure your vehicle is ready.  Here are a few things to prepare:

• Routine maintenance and tune-up - get your entire vehicle checked for worn hoses and belts, correct type of oil and other simple repairs.
• Check your battery - make sure it's got enough charge left to start on those especially cold days.
• Inspect your tires - make sure you have enough tread to handle the snow and that they are properly inflated.  Consider switching to snow tires for the winter.
• Check your cooling system - make sure you have enough anti-freeze and that there are no leaks.
• Check your windshield wipers and fill the windshield fluid - keep some extra fluid on-hand just in case you run out.
• Fill your gas tank regularly - prevents freezing.
• Floor mats - make sure they are not going to get in the way of operating the pedals.
• Emergency Supplies - pack an ice scraper, shovel, jumper cables, flashlight, blankets, sand or kitty litter, emergency flares or markers and extra water/food for longer trips.

Driving Tips - Make sure you have the right mindset and preparation when heading out on the roads.  Things to think about:

• Give yourself enough time - leave early if you have to and expect longer-than-usual driving time.  Reduce speed and be patient.
• Drive defensively - no matter how good of a winter driver you think you are, that person in front of you, behind you, or next to you may not be as skilled.  Expect slipping and sliding and keep your distance.
• Plan your travel - know your route in advance, make sure someone not with you knows where you are going, check the weather and heed travel warnings.
• Safe driving habits - seatbelts, no distractions, be rested, dress warmly.
• Have an emergency plan if you break down or get stuck - stay with your car, keep a cell phone and charger handy, know who to call, mark your car for other drivers to see, don't run your car in place for extended periods with the windows up or in an enclosed space to avoid carbon monoxide poisoning.

Of course, if you can avoid traveling in the worst weather do it.  It's always better to be safe than sorry.  Protect yourself and your loved ones.  Enjoy the season!

Tips on Shopping for Homeowners Insurance

Shopping for Homeowners Insurance can be quite confusing.  And many people don't understand that not all homeowners policies are created equal.  With home insurance premiums on the rise, price is certainly a factor to consider.  But you also want to make sure that your most valuable possession is going to be properly protected in your worst case scenario...a total loss.  An insurance policy is worthless if it isn't there when you need it.  There are a few important things to consider when reviewing your options.

Dwelling Value - In most instances, your dwelling value should be an estimate on what it would cost to rebuild your home, at today's prices, if that were needed.  Note that this value may be completely different from your home's market value or tax value.  Each insurance company uses it's own software to calculate reconstruction cost.  The more details they gather and enter into their software about your home, the more accurate the dwelling value.  Be careful, because you don't want to be under insured if you ever have to rebuild your home.

Deductible - This is probably your biggest area to reduce your premium.  The lower the deductible...the higher the premium.  And vice versa.  Your homeowners insurance is not designed to be a maintenance policy.  It's for the big stuff.  Problems with your home will happen that may or may not be covered by insurance.  You don't want to file a claim for every little problem that arises with your home.  Your premium could increase with too many claims and you soon might become too risky/expensive to insure.  Weigh your deductible options and choose the one with the best value that is still within your budget if something were to happen.

Limitations - Every policy will have special limits on certain types of property that they will insure and also on different types of perils, or causes of insurance claims.  These limitations can make a big difference in understanding and selecting your home insurance and can often be overcome with endorsements (additions) to your policy.  Here are some of the most common limitations:

• Special Property

• Jewelry
• Firearms
• Collectibles
• Antiques
• Art
• Electronics
• Perils
• Wind & Hail
• Sewer & Drain
• Water Damage
• Theft

The bottom line is that price matters, but protecting your home properly should be the most important thing for you.  You've worked hard for it.  So take the time to understand your policy and find an agent that your are comfortable working with and will help you through the process.

Why Life Insurance?

As a full-service insurance agent, I've been taught that life insurance is the most important policy we can sell.  Yet it's the policy we sell the least.  We sell tons of auto and home insurance.  But not nearly as much life insurance.  Why is that?

The most obvious reason is that for the most part, we're not legally required to have it.  You can't drive without auto insurance and you can't carry a mortgage on a house without homeowners insurance.  But unless you have some individual legal obligation (eg. child support/divorce), you don't have to have life insurance.

Life insurance is also an uncomfortable subject.  Nobody likes to think about death.  And selfishly, many people don't want to pay for something that's not going to benefit them personally.  "I'll be dead, what do I care?"  And at one time, I felt the same way.

Until a couple months ago, when my father died unexpectedly.  And I was not ready - psychologically or financially.  He did not have life insurance and now I not only had to deal with the loss of a family member, but also was stuck with a bill. 

Death is the ultimate game-changer.  The loss of life has a ripple effect on everyone even remotely attached to the deceased - but especially the immediate family.  How would your death affect the people around you?

Here are some of the considerations and expenses to think about when it comes to your life insurance needs:

• Final Expenses - funeral and medical bills
• Loss of Income - will my family be able to support themselves without me?
• Debt - mortgage, credit cards, loans
• Education - can my children afford college without me?
• Legacy - donation to church or charity, family inheritance

Nobody wants to die.  But last I heard, nobody has avoided it yet.  Life insurance is for the living.  How do you want to be remembered?