Sky High Insurance Rates!
by Dave Ramsey
| My daughter is 16, and has just started driving. She has a part-time job and budgets her money, too. But ever since she got behind the wheel our insurance rates have been through the roof. She’s going to pay her portion, but is there anything we can do to lower the cost without going completely bare bones on coverage? |
Dear Dave,
My daughter is 16, and has just started driving. She has a part-time job and budgets her money, too. But ever since she got behind the wheel our insurance rates have been through the roof. She’s going to pay her portion, but is there anything we can do to lower the cost without going completely bare bones on coverage?
Barbara
Dear Barbara,
I know exactly where you’re coming from. I’ve got one of those animals called a 16-year-old in my house, too.
Never go bare bones with a teenager behind the wheel. You need good, high-liability amounts of coverage. Liability is the best buy across the insurance world today, and that includes car insurance. It really doesn’t change the pricing very much, either, to run heavy on liability. I’d advise looking at a minimum of $500,000.
As far as bringing the price down, some companies give discounts for kids who complete a driver’s education course at school. There are even some companies that will give you a break if they’re on the honor roll consistently. About the only other thing you can do is get a high deductible.
Dave
Posted by David
from Kansas City
There in an alternative solution: 1)Purchase reasonable coverage on your automobiles (at least the state minimums), with the highest deductibles you can afford to pay if the occasion arises. 2)Then consider purchasing umbrella coverage in the amount of $1,000,000 to cover your vehicles and home(s). The umbrella provides significantly greater liability coverage in case of a catastrophic event. Umbrella coverage is inexpensive and provides a good deal of peace of mind. You save money by not purchasing expensive higher limits of coverage on your automobile policy, supplementing it with the much less expensive umbrella policy. It's legal and ethical. Your insurance agent/broker can explain the details. Sometimes getting a second opinion from another agent/broker in a circumstance like this is very helpful.
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Posted by Aaron
from Mesa, Arizona
I'll tell you what my Dad did to save on insurance when I was first driving. I was specifically excluded from being insured on all the family cars except the rust bucket that was mine. That meant that I couldn't drive the other cars, but I could get myself where I needed to go.
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