December 1, 2016
I know you hear it all the time. You could save 15% in ten minutes or less. Are you paying too much or auto insurance? But for new parents auto insurance is not necessarily the right place to cut your costs. After all, when first time parents have twins, for example, they are over night doubling the size of their family.
For many of my new clients this is originally why they contact me. I need to spend less on Auto Insurance. However for many of these prospects they are newly minted families. Married with in the last five years and they now have two kids. For one brief minute after their marriage they quickly settled on an insurance agent and merged their auto insurances together. Then, they add two children, a boy and a girl. Now they are calling me because they want to cut their auto insurance rate?
Let me get that straight, in the last three years you have doubled the size of your family and NOW you want to lower your insurance premiums? To be clear, yes I can lower your premiums. But why would you want to at the exact moment that you likley need to increase your coverages. And hence, Increase your premium!
“Yes I can lower your premiums but…”
Let me briefly explain.
When you were newly married you had just two autos and two drivers. If theoretically you were in an accident and exceeded your coverage amounts. Then Potentially you could just slowly bail your way out of the debt incurred. Perhaps, with the advice of a lawyer you could declare bankruptcy. Or if your auto was destroyed and you didn’t have the proper insurance, maybe both of you could share a car. Either scenario potentially involves not having the proper amount of uninsured motorist coverage for yourselves. This too could lead to loads of unpaid bills, medical in this case. Perhaps in that situation you could also just slowly pay those bills off over the course of your lifetime.
Now, however, everything has changed. With those twins comes untold responsibility. With those beautiful kids come more required planning. More focus on risk management. What you need is a good insurance agent to asses your risk and help apply modern risk management through the proper placement of insurance. What you need now is MORE coverage, not less. Why? Let me explain further.
“What you need is more coverage”
The amount of people driving around in your family car has just doubled. So does the requirement for coverage amounts. Why? Although unlikely, its not impossible to image a scenario where everyone in your automobile is injured. All four of you. All At once.
Your driving habits are likely to change…dramatically. Perhaps one parent stops working. Perhaps a Nanny is hired. Regardless, between soccer practice, car pools, quarter nights of sleep, increased trips to the store for milk, you will not be driving as you once did.
You can’t realistically plan on just using one car anymore in the event of an accident. How will those kids get to preschool while you simultaneously still make that 8:30AM meeting? If you one of your cars is destroyed and is not properly insured, can you afford a replacement out of pocket?
If you ever wondered why parents weave in and out of lanes, you won’t for long when your two year old has a melt own because they dropped their sippy cup. I know, taking your eyes off the road and driving while overtired are things that you should never do. But in raising kids (young ones especially) its a fine line between safety and getting through the day. With the general poor mental conditions new parents are often in, likely they are an increased risk to accidents.
As with any advice, this is rather general in nature.
First off, sit down with an independent agent and do a liability assessment. Why? Because now you REALLY need to save your money for your kids and you can no longer can afford an unpaid lawsuit hanging over your heads. The liability assessment may point to the need for an Umbrella Insurance Policy which will sit over your autos and home and possibly other insurance policies.
Second, consider increasing your Bodily Injury and Property Liability Coverage amounts to the max. There are all sorts of reasons to do this, but the best reason is that generally your Uninsured Motorist can not be higher than your Bodily Injury.
Third, increase your uninsured motorist to meet those bodily injury amounts. There are just so many expenses that this coverage may be able to assist you with: days off of work, healthcare deductible, skilled nursing care, baby sitting assistance, cosmetic surgery. Think of what your health insurance may not pay for. When you have two kids to watch, its a lot more than you can imagine.
Next if your nanny is driving your kids or your car, you want to discuss this with your insurance agent. This is complicated business, but in general if your Nanny drives your car “routinely” you definitely need to speak with your agent. Reread this past sentence: “… if your Nanny drives your car … definitely … speak with your agent.”
Consider adding the Rental Car Reimbursement. Since its unlikely that most families will be able to share a car for ten days while yours gets fixed.
As with most clients, consider raising your comprehensive and collision deductible if you want to lower your premiums. This is really your best avenue for cutting down your premium costs. There are other more complex reasons why having insurance deductibles higher is better as well.
Lastly, make sure your car seats are installed correctly. Some local police and fire departments offer inspections of them. I realize that this is not a form of insurance, however its a good risk management best practice. Also read the instructions with the car seats and know that as your children grow you may need to change certain adjustments and reinstall them in a different and new manner. Also know as a general rule of thumb that pretty much any car seat will need to replaced after just about any accident.
Reading about insurance online is not a subsitute for speaking with a licensed insurance agent in your state. Different insurance laws, especially concerning Auto Insurance do exist, state to state. Please read our full disclosures. Thank you for reading about new parents and auto insurance.
Marindependent is a locally owned independent boutique insurance brokerage located just over the Golden Gate Bridge in Marin County California. California Insurance License 0K10734.
Marindependent Insurance Services LLC is a certified green business, certified via the County by the State of California. To learn more about our “green practices” please contact us directly.
Johnson is a native of the East Coast who moved to Marin via San Francisco about 20 years ago. He can often be seen on the wonderful trails in Marin County. California Insurance License 0H11625.