Young Men Want to Pay as Little as Possible for Car Insurance
Any of us who have been young men between 18 and 24 years old or who have had young drivers like that in our family know this: They pay more for auto insurance than any other group. That's because they have a higher rate of insurance claims than any other group. Like the two Fresno, California men in this story, we are about to learn that sometimes the cheapest is not the best.
I Got This Cheap Car Insurance, You Should Get It Too!
This is the story of Philip, a successful young man who found a great deal on auto insurance. He drives a new Subaru WRX which is a sports car. The premium payment was reasonable for a young male driver in California and since he had no assets like a home, driving with the minimum amount of insurance in California seemed like the way to go. He took out a policy with a broker who sold cheap car insurance out of an office in Clovis, CA and didn't really explain the details of the auto insurance policy on the WRX. Philip drove around happily paying as little as he could get away with. His friend Steve bought a used 2004 WRX blobeye and asked how Philip was able to afford a car payment and monthly car insurance payments. Philip suggested his insurance broker. Soon both pals were driving their cars all over central California with affordable car insurance premiums to go with their new cars.
Four days later....
It was an exciting time for both young men. Philip was getting married and Steve was going to be one of the groomsmen at the wedding. Four days after Steve bought his WRX, Philip had his wedding rehearsal dinner. Philip doesn't drink much. He had a beer about 6:30pm. His friends however partied long into the night at the party which was held in the banquet room of a popular bar and restaurant. About 10 o'clok or so, it was decided that maybe Steve had a bit too much to drive. So his friend - the host of the party who had one beer almost 4 hours ago - drove him home in the car Steve bought four days earlier. This is important: Philip was driving Steve's "new" car, the 2004 Subaru.
Years of Karate Pay Off on Highway 168
On the way home, a Honda cut across two lanes and cut-off Philip, driving Steve in Steve's car. Philip retained his quick reactions and slow-motion view of high speed events from martial arts training he had for many years in the Shou-Shu discipline. Philip had two choices: 1) Collide with the Honda coming form the left or 2) swerve to avoid the Honda and deal with a big-rig in the right hand lane. The choice was made in milliseconds: swerve to the right.
I Feel Pretty
The result? Steve's car (driven by Philip) clipped the back corner of the big rig trailer and there was an accident, totaling Steve's' "new" Subaru WRX as it slammed into the cement wall on the highway. The trucker pulled over, the Honda did not. An ambulance was behind it all and both people in the ambulance witnessed the whole thing. They pulled over and luckily no one was hurt. The ambulance driver made it clear that Philip had no choice in the accident and from what they ambulance crew witnessed, he made the best possible choice. Philip later bragged that he could actually see the airbag deploy in slow motion thanks to his martial arts reflexes. He actually turned his head and blocked the airbag with his forearm because all he could think about was the wedding pictures!
Good Thing We Both Have Car Insurance, Right?
Nobody was hurt in this accident, except the poor 2004 WRX. Steve was relieved he had purchased the same car insurance that Philip had. Each knew they had uninsured motorist on their policies. Since the driver that caused the accident took off, One of their policies with the same insurance company was going pay for Steve's smashed car.
"...and no other person on Earth..."
Steve was sober real quick. He was on the hook to a bank for $10,000 and he hadn't made one payment yet. He was scheduled to make years of payments on what was a crumpled mess sitting on the shoulder of a highway in Fresno, California. Surprise, surprise, surprise! The bargain insurance policy was not going to pay for his totaled car. The driver of the car when it got wrecked, Philip, had the exact same policy with the same company. That company was not going to pay for the damage through Philip's policy either. Why? The very front page was the same on each of the young man's policies. It was a full page of text, with one sentence in bold type: "This policy covers this person driving this car and no other person on earth..." was pretty easy to read when you scanned the first page of the policy document. This meant that since person A (Philip) was driving Person B's car (Steve) that there was no coverage in existence that would pay for poor Steve's four day old (too him) car.
What Went Wrong?
This is a true story. These young men did a lot of things right. Most importantly, making sure the sober guy drove. Getting insurance was a smart thing too. Too many California drivers have no insurance at all. We could question the wisdom of buying only the bare state required minimum amount of insurance to be legal. It's unfortunate, but that's what a lot of young people do. There are very good reasons to have adequate insurance. we post more about that later. As with most problems in society, this was poor communication. The boys were trying so hard to get cheap insurance that they ended up with insurance that barely covered things that most people take for granted, like covering a permissive driver. The worst part of this story is the failure of the broker who sold these policies to explain the limitations of cheap auto insurance. Both of these young men have since graduated to "big boy" car insurance and they don't pay that much more.
So What Did Steve Do?
Steve was very lucky. He made a good decision when he purchased his WRX. He bought what is called GAP insurance. GAP stands for "Guaranteed Asset Protection". This is coverage you can buy from the car dealer where you buy the car or sometimes from your lender or auto insurance company. This insurance pays what you owe on your car loan, if your car is a total loss and it is worth less than you owe. Many people buy this when they buy cars with no money down. In those situations, you are adding sales tax and DMV fees to the price of the car so you are financing over 100%of the value of the car right from the start. Steve got another car and Philip is driving his second new WRX, on a lease that includes GAP!
So What Can You Do?
The moral of this story is that it is possible to think you are doing the right thing when you buy insurance and still do the wrong thing. Onereason people don't like insurance is complications like this. Work with us, talk to a REAL PERSON and you won't have a misunderstanding like this that can cost you tens of thousands of dollars and maybe put you in bankruptcy even when you HAVE insurance. At Monson Insurance we sell the same insurance everyone else does. We offer companies for preferred, low risk drivers through companies like Travelers and Safeco. We offer bare minimum policies through Aspire and Western General. We even have companies like Kemper that offer car insurance for both young drivers or experienced drivers. Other brokers and agencies offer them too. At the same price. When you work with us, you will have a full explanation of the policy you purchase with a thorough discussion of the risks and limitations. We're not in a hurry to make the sale. We want happy customers who want to be part of the family. Well informed customers who have a real person they can count on when they need them. You don't have ot pay more for that kind of first class treatment with us. We look forward to bringing you into the family. Email, call or text when you're ready for big boy insurance 😉