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Car Insurance and Which Car Teen Drivers Are Rated On

Car Insurance and Which Car Teen Drivers Are Rated On

A client called me last week who was surprised at the increase of adding his youngest son with a brand-new driver’s license to the family car insurance policy. I’m reviewing his options, but thought this was a great example of how car insurance companies take different approaches concerning vehicle assignment when adding a teen driver. These differences can result in some very surprising rates, especially if the new driver will be sharing one of the family cars! All Vehicles: The company my client is with does not assign any driver in the household to a specific vehicle on the policy as their primary vehicle. Instead, it opts to rate the policy with the teen driver, as well as all other drivers, to every car on the policy, whether they will drive them or not. The reasoning for this approach is the teen driver has access to each car in the household and is therefore rated on each vehicle. In this case, the teen with the new driver’s license is listed on his mom’s BMW and brother’s sports car resulting in a dramatic increase in the family’s rate. Most Expensive Vehicle: Other car insurance companies will rate the teen as the primary driver on the most expensive vehicle in the household, even if they are not allowed to drive it. This too can have dramatic effects on the family premium since a newly minted driver is several times more likely to be involved in an accident the first two to three years of driving. Vehicle Assignment: Still other car insurance companies allow each driver in the household to be assigned to a specific vehicle as their primary vehicle. In this instance, we can assign the teen, or other family members, to a specific vehicle as the primary one they’ll be driving. While all vehicles are still available for the teen to drive, rating them mostly on either dad’s, mom’s, or a sibling’s vehicle keeps the premium more realistic overall. Own Vehicle: A variation on the vehicle assignment option, is when the new driver will have their own car and we’re able to assign them as the primary driver on that vehicle. Preferably, this will be a used vehicle with four doors, or a small pickup truck, or SUV which tend to carry more favorable car insurance rates than a two-door car or newer vehicle. The teen is still listed as a potential driver on the other vehicles, however, the car insurance company recognizes they will be the primary driver of a specific vehicle rather than dad’s or mom’s more expensive vehicle. I’m working through my client’s options with our other carriers to determine which car...

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Texas Townhouse Insurance

Texas Townhouse Insurance

I wrote about condominiums and condo insurance last week and this week, I wanted to follow that up with an overview on townhouse insurance. The reason for addressing townhouses as a distinct home type is they have elements of a traditional single family home. They also share something in common with condominiums as they have a mandatory homeowner’s association and are usually found in highly planned communities. Since a townhouse shares features with both single family homes and condos, there are usually two ways the townhouse insurance can be written. Which one’s the right one for your townhouse depends on who’s responsible for the home’s exterior walls, roof and foundation. This is usually clearly outlined on the association policy. Once I’ve gathered information about the home from the owner or buyer, I call the person who administers the HOA policy to ask whether it covers the exterior and roof of the town houses in the community, or does it just provide liability coverage for the association. Whenever possible, I’ll request a copy of the certificate of insurance to verify what’s covered by the association policy. If the association policy only provides general liability and related coverage for the association, I’ll quote a standard home insurance policy which provides coverage for the complete structure of the townhouse including exterior walls, roof, interior finish out and the owner’s personal property and liability. The only thing that differentiates this policy from a traditional single family is the “style” of home which is townhouse as opposed to ranch, Victorian, etc.. The location of the town house may provide a rating difference if located at the end of several homes. In other words, it’s an “exterior” versus an “interior” unit. The presence of a firewall between each home may also make a difference in the home’s insurance rate. Other items which may contribute to a lower rate is if it’s located in a gated community and is equipped with an interior sprinkler system. If the association policy provides coverage for the townhouse’s exterior walls and roof, then a condo policy is called for. This policy type covers the finish out of the home, or sheetrock in, including the walls, flooring, cabinetry, plumbing fixtures, appliances, and personal property or contents of the homeowner. Townhouses continue to grow their presence in north Texas, especially in the tear down and rebuild urban areas. I expect this trend to increase over the coming years as lot and home prices continue to rise in the Dallas / Fort Worth metroplex and people who prefer to live closer to work take advantage of mixed development communities. Besides, not everyone likes yard work! Once I know...

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