Can you imagine Little Eddie of The Munsters at Sweet 16 getting his driver's licence?
That's who I imagined when I read this e-mail. Let's face it; we're all beginner drivers at some point. I remember destroying the alignment on my mom's car by hitting a curb sideways. Even Herman Munster would have had a problem holding the steering wheel straight.
This young driver, whom I'll refer to as Eddie, appears to have had a head-on collision with his insurance company. Buckle up, it's a goody.
Eddie asked: “Will I get insurance, and if so, will it cost me an arm and a leg?”
At 16, he got his driver's licence and decided to go for a spin. He saw that the car in front of him was going to run the yellow light, so he thought he'd do it, too. But at the last second the driver in front changed his mind, and Eddie ended up pushing this guy's car clear across the intersection. Both cars were a write off.
A few months later – still at 16 – he was driving while trying to read a billboard when brake lights suddenly caught his attention. Too late. He slammed into the car ahead of him.
At 20, Eddie bought a car and the second day he had it he got into another accident, a five-car pileup where he was sandwiched somewhere in the middle.
He had insured this car in his dad's name, who I'll refer to as Herman, as the primary driver. After the third accident the insurance company sent Eddie a letter saying that he had to be the primary driver, the accident will be taken care of, but his policy is being cancelled.
His insurance rate had become too high anyway – $8,400 – so he parked the car and didn't drive it, but others did.
Herman got pulled over in Eddie's car for speeding and Eddie got a ticket for not having insurance. Later on his mom, let's call her Lily, uses his car and got into an accident. Eddie got another ticket for not having insurance. I'm sure only Grandpa knew how many times the car had been driven without insurance before the accident. For the curious, these kinds of ticket fines can run as high as $5,000.
Eddie is now 22 and getting married, so he asked me, “I understand being married can reduce your car insurance rate, right?”
Here's the deal. It may surprise you but everyone with a valid driver's licence is entitled to get insurance and there are things that you can do to reduce your rate. Getting married for a discount is not on my recommendation list. Driving lessons might be a better choice.
While the marital status can shave a little off your rate, driver's training can reduce your rate substantially by as much as 15 per cent for six consecutive years.
The combination of tickets and accidents definitely shoots up your rate, but as time goes on they become less relevant.
In Eddie's case, at 22 years old, the two accidents he got when he was 16 should no longer be relevant as they're more than six years old. His other accident, three years ago, will affect his rate. In multi-car pileups all drivers share fault, affecting insurance rates.
His cancellation shouldn't affect his rate. Each insurance company has its own cancellation rules, and where one company may cancel you, another may not.
The accident his mom had would've affected his rate, as all accidents are the policy holder's responsibility. But given he didn't have insurance, it won't.
The two tickets will affect his rate for three years.
What the little Munster should do is buy an older car and insure it only for liability coverage. Insurance for one accident and two major tickets is still going to damage the pocket book, especially if you include collision or comprehensive coverage.
And there is another alternative. If Eddie doesn't want to drive a junker he should rent a car until the accident and tickets fall off his record. A monthly rental is usually cheaper than lease and insurance payments. And given the likely possibility that Eddie's next car may not be long for this world, an accident in a rental will affect the rental company's insurance, not his, because he doesn't have any.
Interestingly, there are also huge savings to be had depending on where you live. As Eddie is getting married, before he decides where he plans to put down roots he may want to go online to compare insurance rates by postal codes. Your postal code can literally change your insurance rate by hundreds and thousands of dollars.
If none of this is to Eddie's liking, he could always try to sell his story to a reality TV show and use the royalties to pay for a chauffeur.
