Donavan Insurance Group: Seven Auto Insurance Buying Tips

Donavan Insurance Group: Seven Auto Insurance Buying TipsLast year, ten days before his 21st birthday, Bradley Dreyer was skateboarding against traffic alongside a rowof parked cars in Sonoma, Calif. when a drunk, uninsured motorcyclist crossed the double yellow line and hithim from behind. Dreyer, who had been studying to be an ER nurse, sustained a severe brain injury.With the help of lawyer Guy Kornblum, Dreyer’s parents got their own insurer, State Farm, to pay out both thefull $100,000 of uninsured motorist coverage on their auto policy and their $1 million in umbrella coverage.But given Bradley’s continuing needs, they now wish they’d carried even more coverage. “We have to facedifficult decisions,” says Bradley’s mom, Mary Kate Dreyer. “We don’t want to rob him of treatment now, butwe need to preserve his estate for the future, what could be lifetime care.”Pull out your policy now. There may be smart ways you can cut your premiums, such as raising yourdeductibles, dropping collision insurance on an older car, demanding special discounts or consolidating yourpolicies with one insurer. But you might also need to pay for more protection from uninsured drivers andcatastrophic injuries, warns Kornblum, who’s dealt with the fallout from severe auto accidents for 44 years.In Pictures: 10 Reasons To Change Your Auto Or Home Insurance1 Raise your deductiblesThe easiest way to save is by increasing both the collision and comprehensive (damage due to vandalism, fire,flood) deductibles for damage to your auto. As a practical matter, if you have a $500 deductible and $700 ofdamage to your car, would you even put in a claim? Many folks wouldn’t for fear it would raise their rates.That’s one reason it makes more sense to have a $1,000 deductible, says Mark McConnell, a claims officer inRoanoke, Va. with ACE Private Risk Services. Consider “full glass” coverage if you’re worried about a ding toyour windshield; it’s cheaper than a lower comprehensive deductible.2 Get uninsured motorist coverageThis protects you and family members living with you should you be hit by a negligent driver who is uninsuredor “underinsured,” even if you’re walking, bicycling or skateboarding at the time. According to the InsuranceResearch Council, at least 16% of drivers, and about a quarter of those in New Mexico, Mississippi, Alabama,Oklahoma and Florida, are uninsured. Underinsured? In California an “insured” motorist in the assigned riskpool can carry as little as $15,000 in bodily injury coverage per person and $30,000 per accident.In many states uninsured motorist protection isn’t mandatory coverage, warns Diane Giles, a vice president atMarsh, a broker representing several high-end insurance carriers. That means you could have a policy withoutit, particularly if you shopped on price. The amount of uninsured/underinsured motorist coverage you carryshould match your auto policy’s primary liability limits–meaning the maximum amount your insurer will paythe other guy if you cause an accident. Typically, that amount is $100,000 per individual and $300,000 peraccident on a primary auto policy. That limit, in turn, should be where your umbrella kicks in. (Some umbrellas

require your auto policy to cover as much as $500,000 per accident. Make sure there’s no gap in coveragebetween the two policies.)3 Carry a big umbrellaAn umbrella, or “excess,” policy kicks in where your liability coverage for your auto and home ends and is anecessity if you have any assets to protect. A $1 million umbrella is common, but $2 million is more realisticthese days. “The more assets a person has, the bigger target they are” for lawsuits, says ACE’s McConnell.Recent jury verdict data show that 14% of personal injury liability cases result in awards in excess of $1 million,he notes. If you have teenagers driving, consider increasing your umbrella. The second million is cheaper thanthe first.Warning: Although uninsured motorist coverage was included in the Dreyers’ old umbrella policy, manyinsurers now either don’t offer it or charge extra for it. Expect to pay $125 to $250 a year extra for $1 millionof such coverage. “You need it,” insists Kornblum, who personally carries a $10 million Chubb umbrella with$5 million in uninsured/underinsured motorist coverage.You can often save on an umbrella by buying it through the same insurer you get your auto policy from; go toan independent agent and ask for combined quotes from several carriers. Be sure to compare what eachumbrella covers.4 Hunt out obscure discountsCertain discounts–say, for a good driving record–are usually applied automatically. But other credits requireaction on your part. For example, as you age, taking a defensive driving course (even one online) could earnyou a credit. If you start telecommuting two days a week, call your insurer and ask for a discount. You mayalso be able to save by buying through a workplace discount program. If you have a teen driver, ask for thegood student discount. (If the kid’s grades aren’t high enough, make him take the bus.)5 Don’t buy a teen his own carIt’s usually cheaper not to add a third car when you’re adding a teen driver to a two-parent, two-car family,because insurers rightly assume the kid will drive less without his own car. (Even without a third car theaverage annual premium goes up 58% with a teen added, according to a recent Insurance.com study.)The exception: If you and your spouse both drive new luxury cars with collision coverage, then you mightreduce both premiums and family conflict by getting your kid a clunker without collision insurance. Warning:Some insurers charge as if the kid is driving the fanciest car in the garage, even if you swear he won’t. So youmay have to sell your midlife-crisis Corvette or get a different insurer.6 Avoid limited tort insuranceIn some states, including Pennsylvania and New Jersey, you can buy “limited tort” coverage at a discount, butbe wary of what you’re giving up. Limited tort means that, even if the other guy is at fault, you generallycannot collect payment for your “pain and suffering”–extra money that may be needed, say to get helparound the house if you’re laid up. “We recommend clients select full tort,” says Giles.

7 Insure for a total wreckIf you’ve got a paid-up car older than five years or so (depending on the model) it may make sense to dropcollision and comprehensive. That’s because if you wreck your car or it’s stolen, most insurers will pay out thedepreciated value, which could be less than it takes to replace your older car. That’s also true if it would costmore to repair your car than it’s worth.On the other hand, if you have a car loan outstanding or are leasing a car, consider topping up your coverage.MetLife Auto & Home, for example, offers “gap” insurance, which pays the difference between thedepreciated value and the amount needed to pay off the loan or lease, and raises comprehensive/collisioncosts an average of 7%.High-end carriers like Chubb and ACE offer the option of setting an “agreed value” at the start of eachpremium year for the amount you’ll receive if your car is totaled. It paid off for one of Giles’ adult daughters,whose VW Jetta was destroyed in a flood. The payout covered the remaining lease and left her with $4,000 fora deposit on a new lease.Our mission is to protect and enhance the financial resources of our clients, thus ensuring their security andquality of life, by providing sound professional management service.Donavan Insurance Group Services Inc. was established in 1986 as an independent insurance agency with areputation for Superior Service. Donna Martin-Boseker, who has been in this industry since 1976, hadpreviously worked in the agency when it was known as Domex Insurance. She purchased the business in 1986and renamed it Donavan Insurance Services Inc. We represent the best interests of our clients and tailorsolutions for their specific insurance needs. We offer a broad portfolio of insurance carriers with highlycompetitive rates. Our coverages include all forms of business and personal insurance.