Groups » Protecting Yourself from Motor Vehicle Loss and Liability: What New Driver’s Need to Know
New drivers are concerned with one thing: accessing the personal freedom and exhilaration of driving their own car. In the process of getting licensed and then purchasing a vehicle, not much is done on average to inform young drivers of the liability risks they will encounter any time they get behind the wheel.
In general, the system does not do a good job warning them of the risk of injury, or the consequences of impaired driving, but understanding how personal liability and insurance coverage factors into a car accident is critical to preventing loss that can last even longer than an injury.
Making insurance coverage mandatory for all drivers was a small step, but understanding the probability of a motor vehicle accident (and why car insurance is so important) is something that young drivers do not want to consider. But the time to evaluate inadequate liability insurance is before the accident occurs, not afterward.
1. Why Are Young Drivers at Risk?
Cost is a factor that frequently places young drivers at further risk. As typical low income earners, many new drivers are looking to cut costs, and one of the easiest ways to do this is to lower your monthly motor vehicle insurance premium. Few people consider the statistical probability of an accident, but data indicates that being on the road is a dangerous part of everyday life. In fact, 32,675 individuals were the victims of motor vehicle fatalities in the United States in 2014 alone, as reported by the Insurance Institute for Highway Safety Highway Loss Data Institute.
Through all age groups, motor vehicle fatalities are a growing problem, according to research from the Centers for Disease Control and Prevention.
> The state of Wyoming has the highest rate of motor vehicle fatalities. Approximately 49% of fatalities in the state involved SUV vehicles and pickup trucks.
> Massachusetts had the lowest motor vehicle survivorship rate out of all states, with 48% of drivers and passengers lost during accidents.
> The highest rate of motorcycle fatalities occurred in Colorado, the state of Nevada, Connecticut, and Rhode Island, and motorcycle deaths accounted for 19% of fatalities.
Increased motor vehicle insurance rates are a reflection of the inexperience and sometimes impaired judgement calls made by young drivers. The CDC reports that the highest risk drivers remain men, and that 16 to 19-year-old men are three times more likely than drivers over the age of 20 to be involved in a motor vehicle fatality.
The highest risk for injury or loss for new drivers (or pedestrians and occupants) is within the first three months of licensure. The risk of a motor vehicle accident also increases exponentially when there are other teens in the vehicle, as distracted driving is a factor. Young drivers from the ages of fifteen through twenty-four years are approximately 14% of the American population, but they are responsible for 30% of motor vehicle loss and injury, in excess of $19 billion dollars per year. They think they are careful drivers, and that an accident is a rare or non-existent concern – until a severe accident occurs. The statistics prompt everyone to provide more driver education and more informed choices when it comes to automobile insurance and personal liability.
2. Finding Comprehensive Motor Vehicle Insurance and Liability Coverage
While the amount of coverage impacts the monthly motor vehicle insurance premium, a comprehensive policy will not only replace the value of the vehicle and contents, it will help shield the driver from injury claims from other drivers or passengers involved in an accident. In the United States, minimum coverage varies by state requirement and is assessed on a case-by-case basis by insurance providers.
3. Exploring Insurance Discounts
Unfortunately, young drivers face escalated insurance premiums, and it is difficult and almost impossible to avoid elevated rates until a safe driving record has been established. However, there are many ways to get excellent coverage for an affordable rate with driver discounts including:
> Student discounts for full-time high school students. Depending on the insurance carrier, maintaining honor roll may qualify the driver for an additional discount.
> Successfully complete a certified driver’s education program.
> Consider a larger deductible of $500 or $1,000 to reduce monthly premiums and keep insurance affordable. It is also a great punitive cost incentive to help young drivers avoid accidents.
Personal injury claims against insurers and insured young drivers can easily escalate from $100,000 to several million dollars (depending on the circumstance of loss, injury or fatality). Finding the least expensive route to insurance for young drivers is risking inadequate coverage. However, while it is tempting for young drivers to pursue the least amount of coverage to save money on a monthly basis, a single accident can substantially impact a driver for a decade or longer.
An insurance policy that comes with a minimum monthly fee also provides the bare minimum protection against financial loss. A comprehensive motor vehicle insurance policy should include coverage for:
- (BI) Bodily Injury
- (PD) Physical Damage Liability
- (PD) No-Fault Personal Injury Protection
- (PIP) Property Protection
- (UM) Uninsured Motorist Protection
- (UIM) Underinsured Motorist Protection
New drivers should consider their motor vehicle insurance coverage as a necessary protection against personal liability and financial risk, as well as covering vehicle replacement and damage. While no one likes to consider the idea of being the victim of a vehicular loss, training young drivers to consider motor vehicle insurance as an important part of responsible financial planning is key. With over 35,000 motor vehicle fatalities in the US every year, combined with an additional 20-50 million injuries, educating young drivers on the need for comprehensive insurance coverage is critical to improving road safety \and protecting individuals from life altering legal liability.