PARENTS OF YOUNG DRIVERS: stay in the loop!

PARENTS OF YOUNG DRIVERS: stay in the loop!

YOUR YOUNGSTERS ARE READY TO HIT QUEBEC S ROADS! When should they start getting insured? Which coverage should you take out for them so they re well protected and you don t go broke? How can you get them to avoid the most common mistakes made by drivers their age? Here s everything you need to know to get through it all worry-free! PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 2

TABLE OF CONTENTS 1. Insuring your young drivers is making sure you have peace of mind 2. Auto insurance 101 3. 8 ways to save on your Auto insurance 4. Driving while intoxicated can cost you dearly! 5. Young drivers and road accident statistics 6. Purchasing a vehicle: 4 questions to ask yourself to save you money 7. An Auto Insurance claim: not the end of the world! 3

INSURING YOUR YOUNG DRIVERS IS MAKING SURE YOU HAVE PEACE OF MIND Before they get behind the wheel, the first thing you should do is check whether your auto insurance covers your youngsters while they re learning how to drive. It s important to find out because in the event of an accident (at fault or not), your insurer could impose certain conditions at the time of compensation if your young driver is not covered. 4

YOUNG DRIVERS AND OUR ROADS Source: Insurance Bureau of Canada (IBC) Over 100,000 new drivers take to Quebec s roads every year, mostly between the ages of 16 and 24. In 2012, 66% OF YOUNG PEOPLE used a car rather than public transit. x10,000 66% PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 5

LEARNER S LICENCE With a learner s licence, your youngster can drive only when accompanied by an adult who has had a permanent driver s license for at least two years (who also have all their wits about them, of course!). A learner s licence will be revoked if four demerit points are entered in that person s driving record and there s a zero tolerance policy when it comes to drinking and driving. The police will fine your youngsters if they committed a driving violation and demerit points will be entered in their driving records. Inform your insurer as soon as your youngsters get behind the wheel Do your youngsters have their learner s licence and do they drive your car when supervised? Add them to your insurance policy as occasional drivers. They ll be covered in the event of an accident. Your premium amount will be adjusted based on several factors, including the age and gender of your young drivers. 6

THE PROBATIONARY LICENCE With a probationary licence, your youngsters can drive on their own...meaning they will soon be borrowing your car. Drivers with a probationary licence can also have it revoked if four demerit points are entered in their driving record and the same zero tolerance policy applies when it comes to drinking alcohol. Do you occasionally or often lend your car? Inform your insurer! If your youngsters borrow your car from time to time or on a regular basis, let your insurer know so they can cover the additional risks. The premium will be adjusted to include your youngsters, but you will sleep better knowing they re covered. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 7

AUTO INSURANCE 101 When youngsters get their driver s licence, they re gaining a bit more independence...and so are the parents! But for it all to get off on the right foot, it s imperative that you be well-informed. This glossary will provide a few insurance terms for your kids...and help to refresh your memory! 8

YOUNGSTERS AND AUTO INSURANCE MORE THAN 85% of the time, parents handle insurance matters. Source: Insurance Bureau of Canada (IBC)? Result: YOUNGSTERS ARE LESS INFORMED about the coverages included in their own insurance than their parents. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 9

BASIC VOCABULARY THE PREMIUM is the amount you pay to get insured. It s usually calculated over one or two years. Insurers base the premium calculation on where you live, how much you use your vehicle, the type of vehicle and your driving record. THE DEDUCTIBLE is the amount the insurer must pay in the event of a claim. The higher your deductible, the lower the cost of your insurance. The higher your deductible, the more the insurer will have to pay for damages in the event of a loss. A LOSS is an event causing bodily injury or property damage to insured property, or loss of the property. Examples of an automobile loss: your car is stolen or vandalized or you are involved in an accident. 10

BASIC VOCABULARY A CLAIM is a formal request by the insured asking the insurer for compensation for damages covered under the insurance contract. COMPENSATION is payment made by the insurer as an indemnity for an injury, loss damage (e.g. having the insured s property repaired, purchasing a replacement for the property that was insured or sending a cheque to the insured as compensation for a covered loss). In all situations, the insurer and the insured are bound by the conditions stipulated in the insurance contract. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 11

GOOD FAITH is the basis on which the relationship between the insurer and the insured is founded. This means that the insurer assumes the insured is telling the truth when taking out insurance. In fact, the insurance representative inquires about the use of the property and the person(s) to be insured. Withholding information or lying to your insurer is never a good idea. Why? The insurer can raise its premium rates in the future, refuse to cover you and even compensate you for a loss. Honesty is always the best policy! THE AUTOMOBILE CLAIMS DATABASE (FCSA) is a database containing all losses over the last six years. Even an undeclared, minor fender-bender will be entered in the database if the other driver filed a claim. 12

COVERAGE Basic Plan Having one-way insurance means having civil liability insurance only. The Quebec Automobile Insurance Act requires all car owners to purchase civil liability coverage or Section A: Coverage for civil liability arising from property damage and bodily injury caused to another person (mandatory insurance). This will cover you in the event of: Damage to your vehicle caused by a collision if you are not at fault and the responsible party has been identified Bodily injury or property damage caused to a third party for which you are liable in the event of an accident occurring in Canada or the United States. Insurers generally suggest $1M of coverage. You can increase this coverage, especially if you re a driver travelling outside Quebec. If you do, it is recommended that you increase your coverage amount to $2M. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 13

Having two-way insurance means being covered not only for damage caused to a third party but also for damage that can be caused to your own vehicle. More specifically, we are referring to coverage under Section B: Coverage for damage to insured vehicles (optional insurance) one-way insurance two-way insurance 14

Most popular coverages: Section B2: Collision and upset, which covers damage caused by a collision for which you are at fault or when you are the victim of a hit-andrun. Section B3: All perils other than collision or upset, which covers damage such as fire, theft, vandalism and glass breakage. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 15

Based on your needs, certain additional benefits may prove worthwhile. Q.E.F. No. 20 Travel expenses Additional coverage options How will you be able to get around following an accident that deprives you of your vehicle for several days? In this case, a Travel expenses benefit will prove very useful, because it will cover your automobile rental costs or your public transportation or taxi expenses. This benefit also covers additional accommodation expenses in the event of an accident that occurs far from home. TAXI 16

Q.E.F. No. 43 A and E Change to Indemnity (Replacement Value) If you have a new car, you might want to protect your investment by adding Replacement Value coverage to your contract. This coverage will allow you to obtain a waiver of depreciation in the event of the total loss of your vehicle. In the event of a partial loss, the insurer will use new parts to replace damaged parts that cannot be repaired. In the event of a total loss, your indemnity will correspond to the cost of a new vehicle with the same features as those of the insured vehicle. Q.E.F. No. 27 Civil liability resulting from damage caused to vehicles of which named insured is not owner This additional protection covers damage to a borrowed or short-term rental vehicle. It often costs only a fraction of that offered by the renter. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 17

SO WHICH COVERAGE SHOULD YOU CHOOSE? Apart from the civil liability coverage that is mandatory in Quebec, your Auto Insurance can be customized to suit your needs in terms of choice of coverages and deductible amounts. It is up to you to determine the acceptable level of risk for your situation. In other words, if something were to happen to your car (accident, fire, theft, vandalism, etc.), would you be able to cover the full cost? 18

8 WAYS TO SAVE ON YOUR AUTO INSURANCE You think that affordable Auto insurance means that you ll get poor coverage? Think again! It s possible to pay a lower Auto insurance premium without compromising on quality. 19

DRIVE LESS, PAY LESS! It s a simple and efficient way to lower your insurance premium Your insurance premium is based on many factors, including your annual mileage. If your mileage is not as high as you had estimated, your insurer will adjust your auto insurance premium according to your actual mileage. A reduction of just 1,000 km could reduce your premium! Trailers and motorhomes are also eligible for this adjustment to your insurance premiums based on the actual kilometres travelled. Walk, pedal or rollerblade Use public transportation: trains, buses, subway Carpool Join a car-sharing club, like Communauto Move closer to your workplace 20

1. Opt for a two-year contract Your premium will remain the same for the duration of the contract, even if you make a claim. 2. Bundle your insurance with the same insurer Bundling your Home, Auto and Leisure Vehicle insurance with the same insurer could save you a considerable amount on most of these coverages. This is also valid if you bundle the insurance of family members living under the same roof. 3. Get a theft deterrent system for your vehicle If you have a recognized theft deterrent system installed in your vehicle, you ward off thieves. As well, most insurers will offer you a discount on your auto insurance. 4. Inform your insurer of changes to your driving habits As soon as your situation results in a change to your driving habits, tell your insurer about it. Your premium could be adjusted based on how you use your vehicle. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 21

5. Join an association Some insurers offer exclusive discounts to members of a recognized association. If you are a member of an association, be sure to mention it when you call, because you could receive an additional discount. 6. Adjust your coverage based on your needs: Take the time to determine the coverages you really need. You can: increase the amount of your deductibles. If you do, you ll see an immediate effect on your premium amount. Just remember that you will have to pay a higher amount in the event of an accident. Eliminate the Collision benefit if your vehicle has low market value. Choose the Specific Perils benefit (Section B4) instead of Section B3, which includes Vandalism coverage: It is a less costly solution, because the coverage is less extensive. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 22

7. Choose a vehicle model that is less attractive to thieves The vehicle model has an impact on the insurance premium. For example, choosing a four-door sedan can help to reduce your insurance premium. However, a higher risk of theft is associated with certain types of vehicles, and the insurance premium for those vehicles is higher. Remember that vehicles with expensive parts are more expensive to insure. For help in making an informed choice, refer to the most often stolen vehicles table. 8. Drive carefully By following the Highway Safety Code, you can obtain discounts associated with your driving record, based on demerit points and motor vehicle accident claims. 23

DRIVING WHILE INTOXICATED CAN COST YOU DEARLY! One can never say it enough: drinking and driving is illegal and can have many serious consequences, even for your auto insurance. It s always a good idea to have this discussion with your young drivers so they can fully grasp the consequences. 24

Here are the facts: If your youngsters are arrested for impaired driving, their driver s licence will be automatically suspended and they will be obligated to notify their insurer immediately. Their premiums could double or even triple for the three years after their licence is suspended. They could stay higher than their regular premiums for as long as six to 10 years. They could also incur all kinds of other expenses, including the cost of extricating the vehicle, installation of an ignition interlock device, lawyer fees, etc. Why risk so much when effective alternatives are available to everyone? If they ve been drinking, they could get a ride from a designated driver, use a safe ride service, call a taxi or take the bus! PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 25

DRIVERS AGED BETWEEN 16 AND 24 YOUNG DRIVERS AND ROAD ACCIDENT STATISTICS IN 2011 10% 23% 63% Most young drivers believe they can t get into an accident. % OF THE POPULATION WITH A DRIVER'S LICENCE IN QUEBEC % OF DRIVERS INVOLVED IN ACCIDENTS RESULTING IN BODILY INJURY % OF YOUNG DRIVERS UNDERESTIMATING THE RISK OF BEING INVOLVED IN AN ACCIDENT Main causes of accidents among young drivers: INEXPERIENCE AND RECKLESSNESS. ALCOHOL, DRUGS AND SPEEDING are often factors. Prevention and education are the means through which parents can help improve these statistics. That s why the SAAQ launched the I Drive My Own Life awareness campaign. SOURCES: Société de l assurance automobile du Québec (SAAQ) and Insurance Bureau of Canada (IBC) 26

PURCHASING A VEHICLE: 4 QUESTIONS TO ASK YOURSELF TO SAVE YOU MONEY Will you be accompanying your youngsters for the purchase of a new vehicle, or are you looking to buy a used vehicle that you can lend them? Before you make a purchase, ask yourself these four questions that will let your youngsters drive without costing you the shirt off your back! 27

HOW MUCH CAN YOU AFFORD TO PAY? If the vehicle purchase itself is a major expense, the fees associated with it will be just as great. Fuel, insurance, tires, registration, repairs and maintenance are other aspects to consider! Use a driving costs calculator to determine your vehicle budget, and be sure to come to an agreement with your youngsters on who will be paying for what. NEW OR USED? When you invest in a new car, you do it to drive a new model, for the warranty or to have a vehicle that you can drive for a long time. You should consider the fact that your vehicle will depreciate 25% as soon as you purchase it. Buying a used car (inspected!) also has its advantages: costs less, higher resale value, original guarantee is transferable and can be extended... Weigh the pros and cons of each option, but remember to stay on budget. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 28

HOW TO FINANCE If you re not paying cash, you have two sources available as options for financing: a financial institution or the dealer. This article from the Office de la protection du consommateur (in French only) can help you make the right decision. HOW TO GET MORE BANG FOR YOUR BUCK! Opt for a fuel-efficient car with lower insurance costs to save on user fees. Take the time to shop, take advantage of seasonal offers and negotiate with the dealer. Above all, start saving early, in a High-Interest Savings Account for example! It s one of the best ways to save for the purchase of a vehicle while also making your money work for you. You can also transfer part of your pay cheque straight into a special account to pay for the purchase. You won t even need to think about it! 29

AN AUTO INSURANCE CLAIM: NOT THE END OF THE WORLD! Has your car been stolen, vandalized or damaged in an accident? An experience like that pushes us out of our comfort zone! Keep the information below handy so that you and your young driver will know what to do if it happens to you. 30

WHAT TO DO IN THE EVENT OF AN AUTO CLAIM (THEFT, VANDALISM, ACCIDENT) 3 4 1. If someone was injured, call 911 2 5 2. If it was a minor fender-bender with no injuries, fill out a Joint Report of Automobile Accident 3. If there was damage to the property of others, stay on site and call the police 1 911 6 4. Notify your insurer and verify your coverages 5. Have urgent repair work done 6. Keep all your receipts PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 31

WHAT TO DO IN THE EVENT OF AN AUTO INSURANCE CLAIM Contact your insurer to report the damage sustained and file a claim, if appropriate. You need to know that reporting a loss is not the same thing as claiming an indemnity! You are responsible for reporting any loss to your insurer as soon as you become aware of it. THE FCSA A record of all automobile losses remains in the Automobile Claims Database (FCSA) for a period of six years. The file, managed by the Groupement des assureurs automobiles du Québec (GAA), contains the details of each automobile loss, including the name of the person at fault, if appropriate. Only you and the insurers to which you have submitted an indemnity claim are entitled to access your file. To make any corrections required (see steps to take). Remain calm and call 911. ACCIDENT WITH INJURIES 32

FENDER-BENDER If it is just a fender-bender, police presence is not required. You and the other driver will have to fill out a Joint Report of Automobile Accident. If you don t have a copy, write the following information down on a piece of paper: drivers names, as they appear on each driver s licence drivers addresses driver s licence numbers licence plates names of insurers and each driver s auto policy number. The Joint Report will allow your insurer to determine your share of liability and calculate the indemnity you are entitled to receive based on the Direct Compensation Agreement. You should never voluntarily assume liability for a collision. That determination is to be left to your insurer. PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 33

DAMAGE TO SOMEONE ELSE S PROPERTY If your vehicle strikes and causes damage to a fence, pole or residence, the civil liability component of your contract will apply. In such a situation, you must remain at the scene of the accident until police officers arrive, so that a police report can be prepared and the owner of the damaged property can be notified. WHAT TO DO AFTER AN ACCIDENT Contact your insurer and provide the Joint Report or the police report number. Take a photo of the initial damage and do what is necessary to protect your vehicle from any additional damage. You can take care of any minor repairs that are urgent and necessary in order to put the vehicle back on the road. For example, replacing a broken window or a damaged tire. Keep the receipts and documents for subsequent examination by the insurer. 34

THE CLAIM PROCESS During the claim process, the insurer will Determine your share of liability in the accident Arrange for an assessment of the damage and establish repair costs Determine whether the loss is covered by your insurance Compensate you according to your coverage PARENTS OF YOUNG DRIVERS: STAY IN THE LOOP! 35

ARE YOU ENTITLED TO A RENTAL CAR? If the Travel expenses Q.E.F. No. 20 benefit is included in your contract and the loss that you sustained is covered by your insurance, your automobile rental costs or your public transportation or taxi expenses are usually covered. However, make sure you check your contract to see what the maximum reimbursement amount is. WILL THE PREMIUM INCREASE? It is the number of claims in the last five years (and not the amount paid in claims) that has an impact on the premium. According to the Insurance Bureau of Canada (IBC), the increase for not-at-fault accidents occurring in the last five years will be low. However, the increase will be high for two or more reported at-fault accidents occurring in the same period. You also need to know that the premium will only be adjusted on renewal of the contract and not during its term. You should therefore enquire about the possibility of getting a contract with a two-year term, so that you can lock in your premium for the term of your contract! 36

HAPPY TRAILS! www.lacapitale.com/en/individuals/insurances/automobile-insurance