Do you have a child heading off to college?

You better talk to your Insurance Agent about your new College Student.

Raising children can be an amazing experience, full of milestones and accomplishments. None are larger than graduating from high school. When your child does graduate from college, if they are planning to head off to college, you better sit down and talk to your insurance agent about how to most effectively navigate the next five years of your child’s life. Here are six tips for taking care of your child while they are away at college.

Contact Your Insurance Professional

If you have an insurance agency that you partner with you should contact them around graduation time if you have not already done so. You will need to discuss what options you have for both their car and health insurance, as well as what behaviors you need to let your child know about related to risk management and insurance.

Understand the Risks Your Students Faces

It is important to talk to your teen about the risks they face when living away from your house out on their own. It is equally important to talk to them about the costs associated with their actions and what repercussions they will face if something happens that causes insurance rates to go up. Teens often forget that the cost of owning a car includes auto insurance. Explain what a driving infraction is and how it impacts the rate you pay for insurance with numbers and concrete examples.

Shop Around

The best way to shop around for better price and coverage is to partner with an independent insurance agent. Many agents partner with one insurance carrier (captive agents) and some partner with a select few insurance carriers. This limits the amount of policies they can find for your businesses unique insurance needs. Most independent insurance agencies partner with ten or more insurance carriers. Some partner with even twenty or thirty carriers. From your perspective, the more the merrier. This is because you can call one agent and they can come back to you with numerous quotes from multiple carriers. This causes more competition and can get you better coverage at rock bottom rates.

Is your teen going away to school and are they taking a vehicle?

When your teen heads away to college, you may be eligible for lower premiums if they leave the car behind. In some cases parents will do this for the first semester or even the first year as a trial period. Once the child shows some responsibility and hopefully good grades the parents allow them to take a vehicle away with them. No matter what you decide to do for your child, it is important to keep your insurance agent and carrier in the loop.

Keep Your College Student on Your Own Policy

In most cases, it is less expensive for parents to add a college student to their insurance policy than it is for students to purchase insurance on their own. Multi-vehicle discounts are available when insuring your college student’s car with the same insurance company.

Increase Your Liability Insurance

When a college student gets into a car accident, the state minimums for liability insurance are not always enough to protect your and your child if they are sued for damages. If you have a minimum policy with $15,000 for damages and $20,000 for medical; the damages from a serious accident can be more than this amount fairly easily. Many vehicles on the roads cost more than $15,000 and a weeks stay in a hospital can total $20,000. If your college student is found to be negligent in the accident and the damage exceeds the limits of your policy, you can be held financially responsible for the remaining damages. Raising your liability limits may increase your premium by a few hundred dollars a year, but it may save you thousands when your college student causes an accident.

Ask about a discount for Good Grades and Driver Training

If your child is a good student or they have up to date driver training, it may be worthwhile to mention this to your agent when purchasing coverage for your college student. Most carriers give a discount to students who maintain at least a “B” average. Another way to earn a discount is by having your teen take a recognized driver training course.

When does a Business need Hired and Non Owned Auto Insurance?

Hired and Non Owned Auto Insurance is a type of insurance policy that many businesses need and far too many fail to secure. According to the International Risk Management Institute, Hired and Non Owned Auto Insurance is defined as; ‘an auto that is used in connection with the named insured’s business but that is not owned, leased, hired, rented, or borrowed by the named insured’. In layman’s terms this is an insurance policy for a business when an employee of that business uses a vehicle for business purposes that is not owned by that business. This could be an employee driving their personal car for business purposes or it could be an employee driving a rental car while travelling to a conference representing the business. The insurance policy will cover bodily injury and property damage to third parties damaged by an accident that is the fault of your employee. This policy can be purchased as a standalone policy or as an add on to your commercial auto or general liability insurance policies. Here are some things you need to know about this coverage if you own a small business and have employees who use vehicles the business does not own.

You can purchase it as a standalone policy, or you can add it on as a rider to your General Liability Insurance.

What exactly does Hired and Non Owned Auto Insurance Cover?

Hired and Non Owned Auto Insurance covers some damages for cars that employees of your business use but the business does not own those cars. These vehicles include rental vehicles, leased vehicles, and employee personal vehicles. The policy covers specifically the damage caused to third parties, but not always the damage to the vehicle your employee is driving.

Examples of when you need this coverage

You send an employee on an errand to pick up supplies in their own vehicle.
An employee rents a vehicle on a business trip.
You send a limo to the airport to pick up an important client.
An employee runs out to get coffee or pick up lunch for everyone in the office.

What is not covered under a Hired and Non Owned Auto Insurance Policy?

A Hired and Non Owned Auto Insurance Policy does not pay for physical damage to your employees vehicle. That damage would be covered by the employees personal auto insurance policy. It also will not pay for the repair of a rental vehicle that is damaged by in an accident that is caused by your employee. It does not cover accidents that occur during a commute to work, unless the employee is using a vehicle rented by the business. Another scenario that is not covered by a Hired and Non Owned Auto Insurance Policy is when an employee is running a personal errand during work hours, but they are not doing business operations.

What are the differences between Hired and Non Owned Vehicles

Hired Vehicles refer to car services like a taxi or limousine and rented vehicles your employees use for business purposes. Non Owned Vehicles refer to vehicles that are used by your employees that are not owned by the business. The most common example of this is an employee using their personal car for business related travel.

Auto Repair Shops

Direct Primary vs Legal Liability for Auto Repair Shops

The difference between Garage Liability Coverage and Garagekeepers Coverage is the difference between liability insurance and physical damage insurance. The first (liability insurance) covers the insured’s liability for operations, autos, and the second (physical damage insurance) covers damage to customer’s vehicles at auto repair shops. All garage risks need both coverages to properly insure their loss exposures.

Auto Repair Shops

A Garage Keeper’s Legal Liability policy is intended to cover damage to an auto held in their care, custody, or control while it is on consignment for sale or you are servicing, repairing, parking, or installing equipment into the vehicle. Direct Primary Coverage provides coverage even if the loss is not the insured’s fault and is not legally liable. On the surface, this seems relatively easy to understand.

For Example, a customer’s locked vehicle is in a fenced and locked yard. There is adequate lighting in the yard and the vehicle alarm is armed. The electronics are ripped from the vehicle and there is $25,000 in lost equipment and damage. Although you are clearly not negligent – and not legally liable – the claim is submitted to my insurance carrier.

With Direct Primary Coverage, the customer – the owner of the vehicle – is paid no matter whose fault it was. You have a happy customer again and your insurance paid for everything. Well that is great until renewal time, when we can assume that the insurance company will raise the Garage Liability premium by a substantial amount because of the claim. That $25,000 claim typically will continue to affect your premiums for three years.

If you had purchased Legal Liability Coverage, the owner of the vehicle would have had to submit the claim to his own insurance company. Your insurance company would not pay anything on the claim – after all, it was not your fault, you were not legally responsible for the damage – thereby saving you thousands in renewal premium increases.

What is the best option to take? If you have repeat customers that represent a significant part of your business, than Direct Primary Coverage may be the best choice. However, if you do business with thousands of different people and have no significant relationship with them, then Legal Liability Coverage may better suit you.

To recap. Garagekeepers insurance refers to coverage for the cars left in your care, custody or control. Direct primary garagekeepers pays for the loss whether you are legally obligated to do so or not and legal liability garagekeepers only pays out if you are legally responsible for the loss. As a result, direct primary garagekeepers coverage is usually more expensive than legal liability garagekeepers coverage. Both of these options have their positives and negatives. Talk it over with your insurance agent and then make a decision on what you feel is the best for your business. Think long-term vs short term on the cost of the policy. Once you take cost out it will help you determine which is actually the best option.