Hi,
I am a young driver and am planning to purchase a car and therefore an insurance. I am 19 years old, have had driver’s license for a little over a year (but did not drive) and live in CT.
I am planning to purchase not-a-sports sedan so my insurance is not extremely high. As for the insurance, I am planning to get 25/40 limits, one-sided insurance policy without any extra coverages. My relatives , however, insist on purchasing a 50/100 insurance policy because they are afraid I will get into an accident and will not be able to pay off my debt. What should I do? Is it so?
Basically, I know there is an underinsured coverage. So, in case if I get into an accident and let’s assume the worst case scenario – I am the culprit of it. So, if the amount of damage exceeds my limits (25/40) and the other driver bought an underinsured coverage policy, the damage will be covered by his own company. Since I am going to have a one-sided coverage, my damages will not be covered. In the end, I will not be asked to pay off the difference between the limits or will I? My main concern is that I will get into an accident and will be charged enormous amount of money, which will not be able to pay off. Please clarify for me some of these details and offer any advices for a young driver.
By the way, what did you hear about Esurance? Is it a reliable company comparing to, let’s say, Progressive or Geico? The reason I am asking is that I got a quote from both Esurance and Progressive.
Esurance said it will charge $100 a month (limits: 25/40)
Progressive said it’ll charge $450 a month (limits: 50/100).
I do realize that the difference is partially due to selection of different limits. However, the price difference is enormous. What could affect these two numbers?
Will be appreciative for any help.
Thanks in advance.
I do not really want to talk to an insurance agent about my concerns. I feel they will get this information and realize that I am shopping around. Thus price will go up.
I do not have parents here. So, I do not have someone to take me under their coverage.
The issue is either I am getting a 25/40 coverage or nothing at all. I am a full-time student and work part-time…will have to pay for insurance myself. I can afford 25/40 but not others. At the same, I want to make sure that I will not have to go to courts for the rest of my life…
March 4, 2010 @ 5:32 am
My parents have Esurance which was the cheapest among several insurance companies I checked. Progressive was more than double of what Esurance quoted and Geico was somewhere in between. Other insurance agencies I checked were all higher than Esurance.
If you have a newer car, like a 2 to 3 years old, then you should consider getting a full coverage. I am not sure what you mean by one-sided. If you feel that 25/40 won’t be enough, then certainly go with 50/100. The best thing for you to do is to contact the insurance company and tell them your concerns. See what they say and what they would recommend. I hope this helps.
March 4, 2010 @ 6:27 am
Your parents are right. Yes, there is uninsured and under insured coverage, and I’d suggest everyone have it. But if you go bare minimum, and the damage you did was more than your coverage, the party you hit will turn it in to their insurance company who will cover it. But then they will want to be paid back so they will send you a bill for the overage they paid. If you can’t, or won’t pay it, they will take you to court to get it back.
Now, to get the best coverage and rates, I’d suggest you talk to an independent agent, give him all your information, and let him search his data base to find you the best coverage at the best price.
March 4, 2010 @ 7:05 am
Uninsured/Under insured coverage only covers damage to the other drivers vehicle and property and won’t help with your liability issues should you be deemed at fault. Uninsured and under insured does NOT cover you at all unless YOU purchase it; then it covers the deductible on your collision and any overages on repair costs if the other driver doesn’t have insurance or is under insured. It has no liability inference,
25/40 means you have liability coverage limits of 25K to any one person with a total of 40K for any accident. That’s not very much. If you were to be found liable for a serious accident, you could end up paying for it for many years, with garnishments against your paychecks, savings and just about anything you own or will ever own. That’s a serious thought to ponder. With hospital bills easily pushing 50K for even a simple operation and a two day hospital stay, you can see how that can add up fast, especially for a multiple occupant injury accident. Plus, what about property damage? How are you going to cover that Mercedes or BMW or even the Cadillac Escalade worth 60K if it’s totaled? And worse yet, the truth is, it might not be your fault, but in many cases it turns out to be a “he said, she said” type crash where there are no outside witnesses and each party is assessed part fault. Or, if there are more people in the other vehicle pointing the finger at you and little forensic evidence to the contrary, you could be on the hook for the loss anyway.
Bottom line is to get the best policy you can afford with the best coverage. Check with reputable companies such as AAA and some of the ones that offer new driver discounts. I’ve found Progressive and Geico to be higher than most even though they say they’re competitive on line. Esurance is a California based company and seems to have a good reputation for low cost basic coverage.
Finally, check around with local agents for the best coverage for your dollar. Get coverage that you need without any frills you don’t. If you don’t need comprehensive coverage, don’t get it. Same with collision if you have an older car and it’s not financed, and you can afford to have it fixed yourself if it gets damaged. (Banks and finance companies will require you to have collision coverage to cover THEM, and not YOU…people need to be aware of that. As loss payee the bank or finance company gets paid in the event of a collision, and the vehicle owner may get nothing but the junk car, depending on the current value!)
March 4, 2010 @ 7:18 am
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