18 Jul My kids had car accidents. How can I save on insurance?

Q. Two of my kids got into car accidents within a week of each other. Fortunately no one was hurt but I bet my car insurance rates are going to go up a lot. What can I do to make the policy cheaper? I’m afraid shopping around won’t help much because they will have the accidents on their records.
— Mom

A. It’s not an easy question.

And you’re right to assume your rates may go up.

Most accidents occur with new drivers and the cost of these claims can be very high, especially if someone was hurt, said Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton.

He noted, and we concur, given that you didn’t mention injuries, it’s great if no one was hurt.

When he advises his clients, Lynch said, he likes to make sure they have umbrella liability insurance policies before their kids even get their permit.

This provides excess liability coverage above the basic auto policy, he said.

“Generally they are sold in $1 million increments and I am a fan of doing this prior to your kids being licensed,” he said. “It is extremely difficult to get an insurance company to issue an umbrella policy when you have new drivers. It’s much easier before they are licensed.”

Unfortunately, you have few options, he said.

You can wait until renewal and see what happens, he said. Or be more proactive and speak to a insurance broker who has access to multiple companies to see if there are better options with better pricing, Lynch said.

You can also look into increasing the deductibles or even reduce coverage, but Lynch said he doesn’t like the coverage reduction idea.

Call your insurance company to see what your options are. It may offer good student discounts, discounts if drivers take defensive driving courses and more. Some even offer an app that will track your driving and give discounts for good behavior.

Also note that if you have a higher credit score, your premiums are likely to be lower.

“Kids in general are higher risk and when they have accidents, it just reinforces what the insurance company already knew — that they were higher risk,” Lynch said.

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This story was originally published on July 18, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.