Car Insurance | Young Driver Car Insurance

Young Driver Car Insurance



Are you searching for young drivers car insurance for the very first time and wondering how much and what type of coverage you need? The advice that seems to be widespread today is that you should take net worth or $100k, whichever one is the highest. By purchasing car insurance you are basically protecting yourself against those rare but potentially expensive risks. But with a $100k limit, you may well have the impression that you’re protected against big risks, but in reality you are not protected against the really big risks.

Imagine for one minute what would happen if you got into an accident, and you only had liability coverage for $100k, and a person in the other vehicle has, for example, $500k worth of hospital expenses as a result of the accident? The particular insurance company you belong to will not pay and you, all things being equal, cannot afford that kind of money. So what happens, will you go bankrupt and the person who is injured not get treated?

One scenario could be that the plaintiff’s lawyer realizes the fact that you are basically uncollectable over the policy limits and the plaintiff decides to settle at the amount of the policy’s upper limit even though it will not cover all of the losses he incurred. Take into consideration the fact that the greater your assets and income, the bigger the risk that someone may well look for a judgement made against you in excess of your insurance policy coverage.

What happens if a person has several hundred thousand dollars worth of medical bills to contend with and the driver who is at fault has minimal coverage? Basically, if the driver has no assets beyond the insurance policy coverage then the injured person often ends up in a state of bankruptcy so they can discharge the medical bills they have incurred. Under insured and uninsured insurance coverage is very important to have in today’s day and age as medical and hospital costs continue to soar upward.

If the victim happens to have health insurance, that would pay for the medical expenses apart from the initial small amount that is covered by the medical coverage.

An insurance company could pay the victim on the strict condition that they won’t sue. This way the victim basically has a choice of either taking a certain dollar amount from the insurance company, or running the risk and expense of going to trial. So, if your net worth is actually less than your policy’s limit, it would not be in the victim’s best interests to try and sue.

Vast improvement in car designs and the increased usage of seat belts has made for a situation whereby most people that are injured in automobile traffic accidents would be looking at less than $100K recovery, but with more serious accidents claims of more than $100K are more common as these may involve very serious injury or even death and the potential damage claims are very high.

So, does this all mean that our roads are full of under-insured drivers and that if there happened to be a nasty accident the persons involved could end up bankrupt and broke? Well yes, there are thousands of these drivers just driving around and the worst drivers are the ones that tend to have the least insurance, which is all due to the costs involved and the limited availability. It’s also common to see habitual drink drivers with 20/40 coverage!

Have a discussion with your local insurance agent about the relative costs of coverage. Sometimes a quite significant increase in your coverage isn’t too expensive compared to the cost of the actual car insurance policy - or some alternatives, like an umbrella coverage. You should also try and discuss uninsured and under-insured motorist coverage, as protection for yourself.