Month: April 2014

Auto and homeowner’s insurers all look at your credit score as part of their criteria for deciding how much you should pay for coverage. Yet, blemished credit doesn’t necessarily translate into higher insurance premium rates. Instead, it is the overall insurance risk score that can cause a rise in your rates.

Insurance risk scores are similar to the credit risk scores used by lenders to determine whether or not to approve a loan or line of credit because both look at your credit information.  However, the two are not the same thing. Both insurance scores and credit scores look at the same five characteristics of a person’s credit report, although the data are weighted differently:

• past payment history;
• amount of credit owed;
• length of time credit has been established;
• new credit; and
• types of credit established.

The biggest difference is that insurance risk scores are determined by looking at stability and credit risk scores are determined by looking at a reliable pattern. Insurance risk scores focus more on how regularly you pay than on how much you pay and how much you owe. 

The insurance risk score is used by insurers to assist in identifying consumers who are consistent and reliable, as well as those who show a pattern of demonstrating common sense with money. Obviously, it is commonly thought that such people are less likely to file a claim on an insurance policy, thus, they are likely to cost the insurer less money. 

Following is the information many insurance companies use to formulate a risk score and how each is weighed: 

• Past payment history (approximately 35%)

A past payment history is determined by:  how you’ve paid your credit bills in the past; if your bills have been paid on time; items in collection status; the number of adverse public records (bankruptcy, wage attachments, liens); and the number and length of delinquencies or items in collection.  

• Credit owed (approximately 30%)

Credit owed is how many accounts, what kind of accounts, and how close you are to your credit limits. 

• Length of time credit has been established (approximately 15%)

Length of time credit established is how long you have had your credit accounts and how long you have had other specific accounts. 

• New credit (approximately 10%)

New credit is the number and proportion of recently opened accounts versus already established accounts; the number of credit inquiries; and the reestablishment of credit history after payment problems. 

• Types of credit established (approximately 10%)

Types of credit established is the various types of credit accounts including credit cards, retail store accounts, installment loans and mortgages. 

In summary, insurers rely on factors that show long-term stability. So, by demonstrating responsible use of credit and keeping your balances low, you should be able to improve you insurance risk score. A lower insurance risk score could translate into lower insurance premiums if you’ve been impacted by a negative credit history in the past.

If you wanted to, you could build a panic room for protection from robbers or kidnappers.  But what about protecting your belongings when you’re not home?  Perhaps you really don’t want to install an alarm system—or maybe you do.  Either way, here are some no-cost and low-cost tricks to make your protection more complete, and help keep your belongings away from thieves.

Outside Areas

Begin with the landscaping, which is the first thing a burglar sees and the first thing he will assess. To make it harder for a burglar to hide and gain entry:

·        Prune lower limbs from any big trees.

·        Trim bushes so a man could not use one for cover.

·        Move any decorative trellises away from windows or porch roofs so they cannot be climbed for second-floor access.

·        Consider planting thorny bushes below first-floor windows, and be sure they are close enough to the house so that an adult could not wedge behind one to jimmy a window without getting scratched up.

·        Remove any trees or bushes beside exterior doors.  They can hide a burglar from passing cars and they can also hide intruders from your sight when you answer the door.

·        Make sure all ladders and tools are secure inside the house, not inside a garden shed. 

·        If your yard is dim at night, install the brightest, biggest lights you can afford for all entries to your house.  Use them.  Turn them on when you leave the house at night; set up motion detectors to turn them on when you are away.

Inside the Home

Windows generally provide easier access for criminals than doors.  Here are some window tactics:

·        Buy special window locks at your hardware store for all first-floor windows and any second-floor windows accessible from a porch or garage roof.  DO NOT hang the keys on clever little hooks or nails beside the window.  Crooks know that one and will simply break a pane and reach around until they find the key.  (But be sure the whole family knows where the keys are in case of emergency.)

·        Don’t demonstrate the easiest window to enter by climbing in it.  If a family member regularly forgets his or her key, consider leaving keys with a trustworthy neighbor for emergency use.  DON’T CLIMB IN THE WINDOW EVER.  Even amateur burglars can figure that one out, especially if they’ve seen you do it and figure the neighbors won’t notice.

·        For sliding windows, use the same techniques as for sliding doors, below.

Some burglars like to enter like a guest, through the door.  Here are some ways to discourage that sort of burglar:

·        Make every entry door solid core wood or metal; hollow-core doors are easily kicked in.  The door should fit the frame snugly, with no more than 1/8 inch between door and jamb.  If the gap is larger, replace the door, or install a heavy-gauge metal strip available at the hardware store.

·        Replace doors with decorative glass windows or panels.  If that’s too expensive, install break-resistant plastic panes, or install a decorative grille over the glass.

·        It’s unlikely, but if an entry door has hinges on the outside, rehang it with hinges inside.  If that’s impossible, reinstall it with pinless hinges.  Burglars can pop pins and take off the door to enter.

·        Make sure locks on all sliding glass doors are sturdy.  Then use a solid stick of wood or broom handle in the track of the closed door.  

·        Adjust door rollers so the door cannot be lifted out of its track.

A Few More Hints

·        Close your garage door when you’re away, whether or not it also leads into the house.  An empty garage equals “no one’s home.”  Cover garage windows completely with shades or curtains so no one will know if there’s a car in there or not.

·        Don’t leave notes on entries; if you were home, you wouldn’t leave a note.  Not even for FedEx.

·        Don’t hide keys in the yard; burglars know all the usual places, even those cute little garden toads with hollow bellies.

In the midst of a full-blown recession, our country is likely to see an increase in at least one area: crime. As the rate of unemployment sky-rockets and law enforcement budget cuts sweep the nation, experts say a spike in crime (particularly property crimes) is imminent.

The shocking statistics

Although the latest FBI statistics show that violent crime fell 3.5% and property crimes dropped by 2.5% in the first six months of 2008, the agency’s final 2008 statistics are not available yet. However, based on historical evidence, experts predict that a swell in crime is in the cards—and it may already be occurring.

As a matter of fact, 43% of police departments reported rising levels of “recession-related crimes,” according to a recent Police Executive Research Forum survey of 233 police departments. Of those surveyed, 40% of departments said thefts had increased in recent months, 39% said robberies had risen and 32% reported a boost in burglaries.

Sociologists and other crime experts say this uptick in crime is not surprising. History shows that crime rates generally peak during or immediately after a recession. In fact, the U.S. underwent an increase in crime during each of our last five recessions.

Experts point out that police department budget cuts will only magnify the problem. Due to declining sales and property taxes, law enforcement agencies throughout the nation are being forced to activate hiring freezes, postpone buying equipment and even lay off officers.

Protect your vehicle

In the heat of rising property crime rates, experts are strongly encouraging people to take extra care to protect their homes and cars. Here are a few ways to decrease your risk of becoming a car theft victim or at least minimize the financial impact:

·   Install a car alarm.

·   Always roll up your car windows and lock the doors.

·   Never leave valuables in plain view in your car. Lock shopping bags in the trunk and place any electronics, including portable GPS systems and iPods, in the glove compartment.

·   Never park in a secluded area. Find a crowded, well-lit area and try to park near vehicles that are similar in size to your car. If you park a small car between two large trucks or SUV’s, it’s an easy target—thieves can hide behind the cover of the larger vehicles while they break into your car.

·   Remove your garage door opener from the car. Some thieves will steal garage door openers and look for mail or other documents in the car with your address on it. Then, they’ll rob your house when you’re away.

·   Make copies of all the documents you need to keep in your car, including insurance ID cards and registration documents. Black out your home address on the copies. Keep the originals at home or in a safety deposit box, and put the copies without your address in your car. (This ensures that thieves can’t find out where you live.)

·   Carefully review your auto and homeowner’s insurance policies. Items stolen from a car that are not actually part of the vehicle typically are not covered by auto insurance policies. Therefore, you may have to claim thefts of portable electronics, jewelry and other items stolen from your car under your homeowner’s policy. You should also look at your current coverage amount and determine if you need to increase your maximum limits to cover your personal items.

·   Consider purchasing a personal article insurance policy for expensive items like engagement rings, fur coats or other valuables. These polices often include worldwide coverage and no deductibles.

Suffering major damage to a home is a traumatic event for any family. The experience brings shock, worry about family members and pets, grief at the loss of treasured possessions, and stress about the overwhelming task of replacing it all. Right on the heels of these emotions comes a more immediate question: Where will the family live now, and how will they pay for it? Fortunately, standard homeowner’s policies provide coverage for loss of use of a home.

The standard policy contains three Loss of Use coverages: Additional Living Expense, Fair Rental Value, and Civil Authority Prohibits Use. Additional Living Expense coverage pays for the homeowner’s necessary increase in living expenses when the home, damaged by a covered cause of loss, becomes unfit to live in. For example, assume that a severe windstorm knocks a tree into a home’s upstairs. It wrecks three bedrooms and two bathrooms, causing pipes to break and damaging electrical wiring. Since the policy covers windstorm damage and the home is unsafe for the family to occupy, this coverage will pay the extra amount the family must spend to live elsewhere for a period of time. However, the insurance company will pay only the amount necessary for the family to maintain its normal standard of living. If the family was not living in a luxury condo before the loss, the company will not pay for them to live in one after. The company will pay for the shortest period of time necessary to repair or replace the damaged property or to permanently relocate.

It is important to note that the insurance pays only for the increase in costs, less any costs that decrease. If the family had a mortgage payment of $1,000 per month, the rent for a temporary home is $1,200, and utility costs are $50 less, the insurance will pay $150 per month.

Fair Rental Value coverage applies to homeowners who rent out part or all of the premises. Should a covered cause of loss damage the home and make it uninhabitable, the insurance will pay the rental value that the homeowner loses. Coverage lasts only for the shortest time necessary to repair or replace the premises, and the company will reduce the payments by the amounts of non-continuing expenses. For example, if the rental value was $1,000 per month but the cost of heat, electricity and water was $400, and all of these services ceased during the repair period, the insurance will pay the $600 difference.

Recently, an airliner crashed into a neighborhood near Buffalo, New York. In addition to the tragic loss of lives, the crash destroyed one home while barely affecting the others on the street. However, law enforcement authorities required occupants of surrounding homes to evacuate for several days while recovery crews cleaned up the site. These families probably benefited from Civil Authority Prohibits Use coverage. This insurance pays for the increased cost of living elsewhere for up to two weeks when civil authorities prohibit the homeowner from using her residence because of direct damage to neighboring premises caused by a covered peril. Once again, the company will pay only the amount above non-continuing expenses and only the cost of maintaining the family’s normal living standard.

The amount of insurance that applies to these coverages is normally some percentage (typically 30 percent) of the amount covering the home. For example, a policy covering a home for $200,000 would provide $60,000 coverage for the loss of use coverages combined. A professional insurance agent can answer questions about them. Plan ahead; it is always much better to find out how much coverage you have before the worst happens.

You’re cruising down the highway when you suddenly see flashing red lights on the shoulder up ahead. What do you do? Stop your car? Speed up and drive quickly past the scene? Crane your neck as you drive past to get a better look? Or ignore the lights altogether and go along your merry way?

None of the above. When you see a police car, ambulance or roadside assistance vehicle on the side of the road with its lights flashing, you should MOVE OVER.

Every year, thousands of U.S. law enforcement officers and emergency responders are killed or injured on our nation’s highways. According to the National Law Enforcement Officers Memorial Fund, more than 150 U.S. law enforcement officers have been killed since 1997 after being struck by vehicles along our nation’s highways. In response to this tragic trend, most U.S. states have enacted laws to help ensure the safety of law enforcement officers and emergency responders.

Move Over Laws 101

These laws, fittingly named “Move Over” laws, require motorists to move away from emergency vehicles stopped on the side of the road with their lights flashing.

As of March 2009, 43 states had passed Move Over laws. However, only 29 states offer protection for drivers of tow trucks and other recovery vehicles.

Although Move Over laws vary slightly from state to state, the basic details are pretty much the same. Generally, motorists are required to change lanes when possible to give safe clearance to law enforcement officers and emergency responders on the roadside. If motorists are unable to change lanes, they are required to slow down to at least 20 mph below the speed limit.

A little-known law

Unfortunately, most motorists are still unaware of these laws. Just 29 percent of Americans have heard of Move Over laws, according to a national poll by Mason Dixon Polling & Research, sponsored by the National Safety Commission.

According to the same poll, 86 percent of those surveyed support enacting Move Over laws in all 50 states, and 90 percent believe traffic stops and roadside emergencies are dangerous for law enforcement officers and first responders. 

In an effort to get the word out about life-saving Move Over laws, a coalition of traffic safety and law enforcement groups launched a nationwide public awareness campaign. Known as “Move Over, America,” the partnership was founded in 2007 by the National Safety Commission, the National Sheriff’s Association and the National Association of Police Organizations. The coalition was recently joined by the American Association of State Troopers.

Common questions

Here are answers to motorists’ frequently asked questions about Move Over laws:

If I see an emergency vehicle on the side of the highway with its lights flashing, should I immediately switch lanes?

No, the first thing you should do is slow down so that you can figure out your next move. If you’re on a multi-lane highway, change lanes as soon as it’s safe to do so. Move over so that there is at least one empty lane between you and the emergency vehicle on the roadside.

What if I can’t switch lanes soon enough or if I’m on a two-lane road? Should I stop my car?

No, do not stop your car unless you are directed to do so by a law enforcement officer or another emergency responder directing traffic. If you stop, you will block the flow of traffic, which could result in an accident. If you cannot switch lanes due to traffic or if you are on a two-lane road, simply slow down to at least 20 mph below the speed limit before you pass the emergency vehicle.

How can I prevent having a wreck myself while trying to move over from emergency vehicles?

When you spot an emergency vehicle with lights flashing on the roadside up ahead, the most important thing to do is keep your eyes open and stay alert. Scan the roadway ahead of you and stay aware of vehicles around you. This will allow you to anticipate potential problems and assess the situation so that you can react quickly and safely.

 

Whether or not your state has enacted Move Over laws, all motorists should do the responsible thing and follow these general safety rules. After all, it could mean the difference between life and death for an emergency responder or law enforcement officer.

If you’re about to hit the road with young kids in tow, listen up. It’s extremely likely that you either have the wrong child safety seat in your car or that your seat is not installed incorrectly. As a matter of fact, nearly three out of every four child seats in U.S. cars show an obvious mistake in selection or installation that could pose a risk to the child’s safety.

Of course, with a barrage of different child seat options, safety regulations and complex installation instructions, it’s no wonder parents often get confused. However, one tiny child seat blunder could result in tragic consequences. So before you strap in your precious cargo and get motoring, take a closer look at that child safety seat.

Here are a few things every parent or caregiver should know about child safety seats:

The right seat

Countless parents make their first child safety seat misstep in the store simply by purchasing the wrong type of seat. Here’s a quick guide on what type of seat you should buy your child:

• Rear-facing seats: Infants should ride in rear-facing child safety seats for as long possible, according to pediatricians and safety experts. You should not switch your child to a forward-facing seat until she is both one year old and weighs 20 pounds or more.
• Forward-facing seats: Once your child has his first birthday and reaches the 20-pound mark, you can switch him to a forward-facing seat. Your child can continue to ride in a forward-facing seat until he grows tall enough that his ears are level with the top of the seatback, his shoulders go beyond the top-most harness slots or he reaches the seat’s weight limit, as specified by the seat’s manufacturer. (Refer to the seat’s manual or look on the back of the seat for the weigh limit.) Forward-facing seats typically have a weight limit of 40 pounds.
• Booster seat: Once your child is too big for a forward-facing seat, you should switch him to a booster seat. (The average child typically moves into a booster seat around the age of four.) According to the National Highway Traffic Safety Administration, your child should continue riding in a booster seat until they are 8 years old or 4’ 9” tall. Here’s another way to test whether your child still needs a booster: if he can bend her knees comfortably at a 90-degree angle when he sits with his spine flat against the seatback, your car’s shoulder belt straps across his chest (as opposed to his throat), and the car lap belt fits across his hips (not his stomach), then he is probably ready to ride without a booster seat.
• Back seat: Once your child is big enough to stop riding in a booster seat, he should ride in the back seat of the car until he is at least 13 years old. Of course, he should wear a lap and shoulder seat belt at all times, as should everyone in the car.

Some states have passed specific child safety seat laws, so make sure you know and abide by the law in your state.

The perfect fit

Another child seat mistake many parents make is the way the harness fits on their child. Experts say many parents do not pull the harnesses snugly enough on the child.

To ensure that your child’s harness fits properly, try the “pinch test.” If you pinch the car seat strap lengthwise and there is a loop of any size between your thumb and forefinger, the harness is not tight enough.

Proper installation

Of course, the biggest challenge with child safety seats is installing them correctly. Because every car and child seat is different and installation manuals are often incredibly confusing, parents are bound to make mistakes when installing their child’s seat.

Luckily, in 2002, the federal government mandated LATCH (Lower Anchors and Tethers for Children). This system improves child safety by eliminating the need to use seat belts to install a child safety seat in a car, and it also makes the installation process a little easier. Cars with the LATCH system have anchors located in the back seat where child safety seats can easily be fastened. Nearly all vehicles and child safety seats manufactured on or after September 2002 include the LATCH system. However, if you have an older car or child seat, you will still need to use the seat belt to install the seat.

To ensure that your child’s safety seat is installed correctly, find a child safety seat expert in your area. You can find a list of certified CPS (Child Passenger Safety) Technicians and Child Seat Fitting Stations at www.nhatsa.gov or seatcheck.org. You can also call 866-SEAT-CHECK or the NHTSA hotline at 888-327-4236.

With the dawning of Spring often comes a deluge of rain showers and thunderstorms. While a soft Spring rain may seem innocent enough from the safety of your home, even a gentle shower can cause major problems on the road. Thousands of car accidents each year are caused by rain and wet roads—and motorists who don’t know how to drive on them.

During and after a rainstorm, a film of water quickly forms on asphalt roads. This sheath of water causes tires to lose traction, which means drivers can easily lose control. However, slippery roads are not the only danger to driving in the rain. Drivers also lose visibility during a rainstorm. Heavy rain can be absolutely blinding, fogging up the windows and even blocking your headlights. These things all add to an extremely dangerous situation.

If you find yourself on the road during a rainstorm, follow these safety tips to ensure you arrive alive:

1. Be especially careful when the rain first starts. When the roads are dry for a long period of time, engine oil and grease builds up on roads and highways. As soon as the first drops of rain start to fall, the water mixes with this build-up making the roads incredibly slick. This is why the first few hours of a rainstorm can be the most hazardous for drivers. If the rain continues to fall for a few more hours, the water will eventually wash away the greasy build-up.
2. Slow down. You should always drive at a slower speed when the roads are wet. The faster you drive in a rainstorm, the more likely you are to have an accident. Leave the house earlier than usual to give yourself additional travel time so you won’t feel the urge to rush.
3. Brake earlier and slower. When you need to slow down or stop on wet roads, ease on the brakes earlier and with less force than you would normally. This decreases your risk of hydroplaning and keeps a safe distance between you and the car in front of you. It also alerts any drivers behind you to slow down. If you stop too suddenly in a rainstorm, you could get rear-ended.
4. Turn off cruise control. When you have cruise control turned on during a rainstorm, your car could actually speed up if you hydroplane. Plus, when you use cruise control, you’re probably not paying as much attention to the road. Turn off the cruise control and stay alert at all times when driving in the rain so you can react quickly if necessary.
5. Avoid big “puddles.” If you spot a huge puddle in the road up ahead, drive around it or take a different route. Sometimes seemingly shallow puddles can actually be 5 or 6 feet deep—and that amount of water can cause serious problems for your car’s electrical system. Depending on how deep the water is, it could even float your car. If you aren’t sure just how deep a puddle is, steer clear of it altogether.
6. Turn on your headlights. Even if just a few raindrops are falling, turn on your headlights. Not only will this help you see the road, but it will help other drivers see you. However, don’t use your high beams in the rain. This can actually reduce your visibility and blind other drivers.
7. Turn on your defroster. Your windshield can fog up quickly during a rainstorm, which can cause you to lose sight of the road. Turn on your front and rear defrosters and the A/C to defog your windows.
8. Keep an eye out for pedestrians. In a rainstorm, a pedestrian’s view of the road could be obscured by their rain slicker hood or umbrella—which means they may accidentally step into the road at the wrong time. If you are driving in a city or another area with pedestrians, keep a close eye out for people in the road.
9. Pull over when things get bad. If the rain is falling so hard that you can barely see the car in front of you, pull over and wait for the rain to slow down or stop. After all, it’s much better for you to make it to your destination a little late than not at all.

Don’t brake if you hydroplane. If you feel your car starting to hydroplane, don’t brake suddenly or turn the steering wheel. This could send you into a skid. Instead, ease off the gas pedal slowly and steer straight until you feel your tires regain traction. If you have to brake and don’t have anti-lock brakes, tap the brake pedal lightly. If you do have anti-lock brakes, you can brake normally.

Research shows motor vehicle crashes are the leading cause of teen deaths. Tragically, 3,490 teenage drivers (between the ages of 15-20) died in car accidents in 2006 alone, according to the Insurance Institute for Highway Safety (IIHS).

The IIHS, along with other driving safety groups, has spent decades studying teen vehicle fatalities to determine what specific behaviors put teenage drivers in the danger zone. Their research reveals that driving at night, driving with passengers, receiving a learner’s permit before the age of 16 and getting a full license before the age of 18 put teens at a much higher risk of having an accident.

Unfortunately, state laws have failed to keep pace with the latest research. Many critics say states simply aren’t doing enough to protect teens on the road. That’s why the IIHS is imploring parents to step up and set stricter driving limits for their teen drivers.

If you want to keep your teenager safe on the road, consider the following advice the IIHS has to offer:

Make them wait

According to the IIHS, 16-year-olds have the highest rate of car crashes than drivers of any age. Sadly, many of these accidents prove to be fatal. This is why the institute strongly encourages parents to wait until their child turns 16 before allowing them to get a learner’s permit and until 17 to get a driver’s license.

Once the teen receives their learner’s permit, the IIHS says parents should put their teen through a learner stage that lasts at least six months. Parents should supervise a minimum of 30-50 hours of their teen’s driving before allowing them to get a full license.

After the teen earns their driver’s license, the institute says parents should restrict their teen’s driving until he or she is at least 18 years old. Specifically, teens should not drive at night and be limited to just one or no non-adult passengers.

Restrict night driving

Once your teen has earned his license, it’s crucial to restrict him from driving at night until he is at least 18. A 2003 IIHS report shows that driving between the hours of 9 p.m. and 5:59 a.m. triples a 16-year-old’s risk of having a fatal car crash.

Not only is it harder to drive in the dark because of low visibility, but teens are typically more tired at night. Driver fatigue is a major contributing factor when it comes to night-time teen crashes. Of course, the chance of teenagers consuming alcohol also increases as soon as the sun sets. According to the NHTSA, 31 percent of teen drivers killed in 2006 had been drinking.

Limit teen passengers

More than half of all deaths in crashes of 16 and 17-year old drivers occur when passengers under the age of 20 are in the car with no adult supervision. When a teen driver has a teen passenger in the car, they are twice as likely to have a fatal crash, according to IIHS. When a teen has three or more teenage passengers, their risk of a fatal crash is three times higher than if they had no passengers.

Of course, it’s no surprise why this is the case: passengers often cause distractions for teen drivers. However, researchers also believe that teens often “show off” for their teenage passengers by speeding and making riskier choices on the road.

Don’t let state laws dictate the driving limits for your teenager. The research shows that state legislation is simply too lenient for most teenagers. As soon as your child is old enough to understand, start preparing him or her for your unique household driving rules. If you make the idea of “no driver’s license until you’re 17” a family mantra, your teen will be prepared for it when the time comes.

Of course, if you tell your 15-year-old she’ll have to wait until she’s 17 to get a full driver’s license, you’ll probably meet some serious resistance. You’ll also have to listen to endless complaints when you tell your teen he can’t drive at night and is not allowed to have passengers. While it’s never fun to play the “bad guy” or upset your teen, it will be well worth it in the long run. Stick to your guns—after all, it could save your child’s life.

For more information on teen driving safety, visit www.iihs.org.

“Bill, can I borrow your truck? I have to pick up a new mattress.” Questions like this are routine. Friends and neighbors borrow and lend their vehicles. College roommates borrow their friends’ cars. Six cars are parked in a driveway at a party and one needs to be moved so another car can pull out. The owner tosses someone the keys and tells him to move it. When situations like these end with an auto accident, whose insurance pays – the owner’s or the borrower’s?

In general, the vehicle owner’s policy is primary and pays first in the event of a loss. If for some reason the owner’s policy does not cover the loss or provide enough insurance to fully cover it, the borrower’s policy will apply. For example, assume that Joe has a policy with an insurance limit of $100,000 for injuries to one person and Bill’s policy has a limit of $250,000. Joe borrows Bill’s car and severely injures a pedestrian, resulting in damages of $300,000. Since Bill owns the car, his policy will pay first. It will pay $250,000 (his limit of insurance,) and Joe’s policy will pay the remaining $50,000. If Bill’s policy does not cover the loss (for example, if he had let the policy lapse,) Joe’s policy would pay all of its $100,000, but Bill and Joe might be individually responsible for paying the balance.

The owner’s insurance will also be primary for damage to the car itself. However, the borrower’s insurance can make up for a difference in deductible. Suppose Joe has a $500 collision deductible on his car and Bill’s collision deductible is $1,000. Joe totals Bill’s $5,000 car in an accident. Bill’s insurance will pay $4,000 for the car ($5,000 minus the $1,000 deductible,) and Joe’s insurance will pay $500 (Bill’s deductible minus Joe’s $500 deductible.) If Bill’s insurance is uncollectible because he didn’t buy collision coverage, Joe’s policy will pay $4,500 ($5,000 minus the $500 deductible.)

A person must have the car owner’s permission to borrow before the owner’s insurance will cover him. The insurance company will consider the person to have permission if he had a reasonable belief that he could use the car. For example, if Bill at one time said to Joe, “Take the car whenever you need to; the keys are on my desk,” and Joe had in fact borrowed it several times with no objection from Bill, it would appear that Joe had a reasonable belief that he could use it. On the other hand, if Bill never said anything to Joe about using the car, and Joe had to search Bill’s home to find the keys, Joe’s belief that he could use it might not appear to be so reasonable. In this case, Bill’s policy might not cover Joe’s liability for injuries or damages. Worse, Joe’s policy might not cover him, either.

Permission must come from the vehicle’s owner, not from a member of the owner’s family. Joe will not have coverage if Bill didn’t give him permission but Bill’s teenage daughter told him to use it. However, the daughter has coverage if she borrows the car, with or without permission. A member of the owner’s family has coverage without having to prove they had permission. To be considered a family member, such a person must be related to the owner by blood, marriage or adoption.

Before borrowing someone else’s car, we advise people to do the following:

• Make certain you have the owner’s permission.
• Make certain the owner has insurance in-force on the car.
• Check your own insurance to see if it will cover damages the owner’s policy doesn’t cover.

An insurance agent can assist you with the third item. Ask the questions ahead of time to avoid unpleasant surprises later.

For decades, parents have sent their teenagers to driver’s education classes. Whether their child was taught by the high school gym teacher or a true driving expert, parents took comfort knowing that their teen was learning the safest driving techniques. That is, until 30 years ago when a federal study showed that learning to drive from a professional had no effect on the number of teen car crashes and fatalities.

More recent studies by the Insurance Institute for Highway Safety (IIHS) have revealed that driver training, whether taught in high school or at driving school, may not benefit teen drivers. As a result, word on the street is that driver’s education classes simply aren’t effective.

Driver’s ed: Still worth your while?

Despite the studies, anecdotal evidence still shows that it could be worth your time and money to send your teen off to driver’s ed. Why? First of all, teens have to learn how to drive from someone—and if you’re not up to the task, you may need to turn to a pro.

Plus, teenagers may be more likely to listen to and absorb information from a driving instructor than their parents. After all, many teens simply “turn off” their own moms and dads. You know the old saying: In one ear and out the other.

On top of that, if you have any bad driving habits of your own, whether it’s a lead foot or a tendency to get distracted from the road, your teen will pick up these behaviors if you teach them to drive. This is exactly why a driver’s ed class could still prove to be beneficial for your teen.

Find the right program

Of course, driver’s ed classes are not all created equal. That’s why driving experts urge parents to take a closer look at a driver’s education program before enrolling their teen in the course.

But what exactly are you looking for? For starters, the program should focus on much more than simply how to pass the driver’s test. After all, you can pass the driver’s exam and get your license but still be an unsafe driver on the road. Experts say a good driving course should teach teens about risk reduction, including hazard recognition, vehicle handling, space management and speed management.

You get what you pay for

While a public school driver’s ed class may be affordable and convenient, not all of these classes are as effective as private driving school courses. Many public school districts have been forced to cut driver’s ed programs due to budget constraints. If your teen’s public school offers a course, be sure to scrutinize the program closely before enrolling your teen. You might discover it’s worth it to pay a little more for a privately-taught course.

Most private driver’s education courses charge between $250 and $350. If you pay much less than that, your teen probably won’t get the proper driving and safety techniques.

But how can you be sure you’re getting your money’s worth? Experts say you should look for a program that offers the following:

• At least 36 hours of class lasting 9 weeks or longer
• A minimum of six hours of on-the-road training, spread out over several days
• A written curriculum or study plan the instructor is willing to share with you (When you look at the study plan, make sure it isn’t just focused on passing the driver’s test, but also about basic skills, defensive driving, safety, etc.)
• An open door policy that allows parents to make suggestions and ask questions
• Plenty of extra advice for parents trying to reinforce good driving skills

You may also want to look for a course that incorporates digital teaching methods, such as computer games. After all, this generation of teens is extremely technical—there’s tons of evidence that shows today’s teenagers learn more from “interactive teaching” than a chalkboard and textbook.

Ask for recommendations

You may also want to ask parents of teenagers who are already driving where they sent their children for driver’s education. Your colleagues, friends and neighbors may be able to recommend a great course—or at least steer you away from a bad one.

Stay involved

Even if you decide to send your teen to a driver’s ed course, it’s important to stay involved with your son or daughter’s driving education. Ride with your teen as often as possible, on weekends, after school, etc. This will allow you to monitor their progress and ensure they are learning safe and effective driving skills.