Business & Finance Tips

Every year, more of our children die on the road. It’s a national disgrace that, in 2009, more than 3,400 teens died. That’s 10% of all those dying on the roads. Even though right wing politicians disapprove anything the federal government does to limit freedoms, it makes sense to impose new limits on the right to drive. Indeed, the more we do as a country to keep our children safe the better. Except, when a bill was introduced in Congress last year, the GOP used every possible procedural device to slow it down. As a result, it failed to make progress and so was wiped from the slate at the end of the year. Now the Democrats are reintroducing the STANDUP Act (Safe Teen and Novice Driver Uniform Protection Act). It’s always pleasing when titles make good acronyms and this is no exception.

The aim is simple: to keep younger inexperienced drivers off the road. This would be achieved by setting a national standard for graduated drivers’ licensing. Federal highway funds would be tied to encourage states to enact the federal standard within three years. The bill creates a ladder to climb for a full license. It begins with a learner’s permit no earlier than 16, passes through an intermediate stage and ends with a full license. It also creates a number of specific criminal offenses, including driving unsupervised at night without a full license, using a cell phone while driving, and a limit on the number of young passengers. The intention is formally to introduce the rule that no one can have a full license under the age of 18.

Needless to say, the GOP believe this unreasonably interferes with the sovereign right of states. Further, they argue driving in an essentially rural state is not the same as in New York which is full of traffic. Only state legislatures know the detail of local conditions and can make appropriate laws. This explains why teens in North Dakota can start to drive on their 14th birthday, whereas New Jersey prevents a teen from moving to the intermediate stage until his or her 17th birthday. This is not to say any state is derelict in its laws. The Insurance Institute for HIghway Safety rates 37 states as having good laws, but there’s a general failure to deal with distractions while driving. Only 30 states currently ban texting. Worse, only 28 states ban cell phone use by novice drivers. Most driver safety experts think there should be a general ban on texting by drivers of all ages.

Whatever your opinion on hand-held technology and cell phone use, the death of teen drivers is potentially preventable both by limiting unsupervised driving and by insisting on every driver going through an approved course of instruction before being allowed a full license. Of course, nothing can prevent teens determined to drive no matter what the law says. But if we can reduce the number of accidents, this will reduce the auto insurance rates for both teen and young adult drivers. Doing nothing should not be an option. Indeed, it may be better not to use auto insurance quotes as a reason. Simply pitching this to parents as a way of keeping more of their children alive should be enough to pass the bill into law.

If you listen to the commentators, they all sing the same song. We’ve now entered the internet age. This is supposed to convince us something new and wonderful has happened. It’s such a complete break with the past it heralds the beginning of a new information age in which, somehow, we can all get ahead and do things never possible before. This is, of course, pure rubbish. The only difference between the digital age and the hard-copy age that went before it is the ease of access. Having a PC or some other online device gives you access to a vast library with a search engine to help you find the pages you need more easily. But, when you have the right page on the screen in front of you, it’s the same words you could have found in a book or some other written material. All that’s changed is the way the words are presented to you.

So, if you go back in time, printed words have always been used to manipulate people. They sell ideas to you. This means real power lies in the power to control access the means of publication. If a group can control what gets printed and distributed, the words can always tell the same story. But if the means of publication is open to other voices, this can give a completely different view of the world. This is why reputations can be made or unmade depending on who has the power to publish.

The problem for modern companies is anyone today can start up a blog or website. Many internet services are free to use. Similarly, the networking sites like Facebook allow people to write their opinions and describe their experiences. In the past, we would never get to hear Anne from Denver bought a steam cleaner that sprayed boiling water over her hands. Now she can write it and thousands of people can tweet it. It makes it very difficult for manufacturers and service providers to protect their reputations. This explains, in part, why insurance companies very rarely allow interaction on their sites. Since they cannot control what sometimes angry customers may say, they try to deny them a voice. Except there are now some very high profile sites on which people can complain about bad products and services. This movement is not yet sufficient to damage the vast insurance industry, but individual companies are finding it more difficult to prevent their reputations from slowly washing away.

This makes the recent announcement of a new online forum all the more encouraging. The intention is to allow people from both sides of the insurance relationship a chance to ask questions and have their say. Instead of a blank screen on which insurers give you the news they think you should hear, you can now ask about how to get more affordable car insurance rates, what to do if a claims adjuster low-balls the fair market value offer, and so on. This does not mean everyone on the forum will be an “innocent” consumer. There will inevitably be anonymous industry experts giving balancing views and opinions. But this is a hopeful sign of change. You may even get cheap car insurance quotes because of pressure through forums like this.

It would be better if the world was an easier place, if everything was straightforward. But it’s not. Sadly, the world is a hard place and seller take your money without having to deliver the service whenever possible. The Romans had a saying, “caveat emptor”. It means, “let the buyer beware”. So the good advice from two thousand years ago is always read the small print before you sign the agreement. That way, you avoid the bad deals or, if there are likely to be problems, you can see where they are and work round them. If there’s anything you don’t understand, ask. You usually find companies are obliging before you sign. They want to appear willing so they can take your money.

Let’s start with the good news. The courts in most states operate the rule that any ambiguity in the policy is always resolved in your favor. Courts reckon insurers can afford the best attorneys to write the contracts. If they can’t get the wording clear enough, that’s their problem and they have to pay out on your claims. But if the wording of the agreement is clear, you’re caught by whatever it says. If you never bothered to read the policy or read it and failed to understand, that’s your problem.

As an example, here’s a recent case from sunny Florida. M lived on her own. She owned and insured a car, but allowed her granddaughter to drive it. Her granddaughter lived with her parents at a separate address. On the fateful day, the granddaughter was driving the car with the family as passengers. There was an accident. The driver and passengers were injured. So here comes the first question. Can you say who your “relatives” are? That’s easy, isn’t it. This is anyone related to you by blood or marriage, and it has nothing to do with where they live. So if the policy says the insurer will pay on a claim when the car is driven by the insured and his or her relatives, you know what that means. Does the policy also cover the car when it’s driven by anyone else with the insured’s consent? That can be important if, for some reason, you need a neighbor or friend to drive you around.

So what do you make of this phrase: there’s no coverage for any injuries to an insured or a family member living with the insured. Is the “insured” always M, the policyholder paying the premium installments, or does it include relatives or others driving with the owner’s consent? The Florida appeals court has just held the word “insured” always refers to the driver. This meant the granddaughter and her parents could not claim for their injuries because they lived together in the same house. You would have known that, right? This car insurance policy is unambiguous. You didn’t think M was the insured and so the driver and her passengers could claim?

Courts have a habit of thinking some words have obvious meanings. If you are covered when you drive, you are insured no matter whether you pay the premium. So to prevent being caught, read the policy before signing. Don’t just accept the car insurance quotes on the basis of cost. If you have any doubt, ask what the policy means.

There’s never reliable information on driving habits. Everything changes as the price of gas rises and falls, and as family budgets come under more pressure. All we can say with any certainty is, regardless of the state of the economy, people do try to get together to celebrate the holidays as a family. This can mean traveling significant distances and it’s where the budgets come in. When people have the money, they tend to drive to the nearest airport and board a plane. Even though the new security measures can threaten the privacy of your junk, most people find flying better than sitting in a car for long periods of time. Yet, when you add up the cost of the tickets plus the need to rent a vehicle at the other end, you can save so much money if you all get into a car and share the driving to where you are going.

So let’s say you decide to make the long drive, here are a few basic precautions before you set off. First, the farther you are proposing to drive at a busy time of the year, the higher the risk of an accident. Sadly, the holidays bring out a lot of weekend drivers who suddenly switch from short runs to a long journey. They tend to lose concentration. Some even fall asleep at the wheel. So now is the time to think carefully about collision and comprehensive cover (assuming you don’t already have them), and check your health insurance to ensure there will be enough money to cover any visits to the ER out-of-state should you have an accident. That way, you can avoid unpleasant surprises if your journey is interrupted.

Now spend a little money on some routine maintenance. You trust your vehicle when it’s just running around locally. A long run is a whole different ballgame so check the tires and have the engine serviced. The last thing you want is a breakdown in the middle of nowhere when no local garages want to come out and rescue you. Remember to pack emergency supplies should you be stuck by the road in bad weather.

Now suppose you decide to rent a big comfortable people mover for the journey or you fly and rent at the airport. You need to think carefully about insuring the rental. The rental company must give you the basic minimum liability insurance for the state(s) in which you will be driving. Remember, most of these policies do not cover you if you drive into Canada or Mexico. Now the big decision. Even if you have a collision and comprehensive policy on your own vehicle that covers you when you drive a rental, you can find your premium rates climb if you make a claim. It therefore makes sense to buy the Loss Damage Waiver. This pays all the bills if the rental is damaged or stolen. Finally, check your homeowners insurance to see whether all your possessions will be covered in a rental vehicle. It’s probably better to deal with this before you confirm the rental agreement. Get auto insurance quotes for the different possible types of cover. If you are paying for the rental by credit card, there may be some auto insurance thrown in but check the terms and conditions carefully.

There’s now a training and accreditation body called the Wellness Council of America. It’s trying to catch the wave by establishing standards for all sides of the equation, namely the employers, the employees, the medical profession, wellness professionals and the insurance industry. This is like trying to herd cats. Most employees come to work and fail to see any benefit to them in participating in any fitness exercises or comparable activities. Indeed, many grow deeply resentful if their employer tries to push them into dressing in something sporty and getting out of breath doing something aerobic. They see this as an invasion of their privacy. If they want to be overweight or merely unfit, that’s their business and their employer is not paying them to lose weight or prepare for the next NY Marathon. Yet, perhaps surprisingly, three-quarters of all employers are now offering some type of program. We all know this enthusiasm for encouraging greater levels of activity in their employees is rewarded by lower premium rates from the insurers, but why has it become so popular?

This is where statistics hit the wall of prejudices from all the individual employees who resist being rousted out of their comfortable offices and set workplace routines. The evidence suggests that every $1 spent on a comprehensive wellness program saves about $3 in health costs. Even more interestingly from the employer’s point of view is that healthy employees tend to have better morale and work more effectively. When you add in better attendance and greater productivity, employers tend to be pleased by the outcomes. So how are employers persuading their employees to play ball (literally and metaphorically)? The answer comes in two completely different elements.

First, the program must be well-designed. This starts with an analysis of the health records of all the staff. When the employers look back through all the health claims made over as long a period as possible, it’s possible to identify the health problems most consistently affecting the loyal workers. Pleasingly, this may indicate changes to work practices to reduce the incidence of these problems. For example, if too many staff are affected by repetitive strain injuries, a simple redesign of the work may avoid the problem. This will improve the attitude of the staff who will no longer feel victimized and save money on health claims. To speed this process along, it’s often a good idea to establish employee committees to discuss workplace problems and suggest improvements to minimize injuries. Again the evidence shows directly involving the employees in changing workplace routines to make life easier and safer is highly motivating.

Second, staff have to feel motivated not just in theoretical discussions but also in participation. This relies on financial incentives. Look at bonuses for completing a course of activities, or in hitting a weight target, or being able to meet a jogging target. This can be in cash or in contributions to the health savings accounts. The more employees receive incentives, the better their active engagement. The result of the best programs is cheap health insurance rates for all active participants. The word of mouth generated by those with savings encourages the slackers. Health insurance rates will be lower if all if employers plan and reward their staff.