What it is

Hydroplaning occurs when built-up water on roadways is not sufficiently pushed out of the way by your vehicle’s tires when going at a regular or high speed. The water then causes your vehicle to rise and slide on top of a thin layer of water between your tires and the road. All traction is lost in less than a second and you have very limited control of your vehicle. 

There is no precise equation to determine the speed at which a vehicle will hydroplane. In general, cars hydroplane at speeds above 45 MPH , where water ponds to a depth of at least 0.10 inches over a distance of 30 feet or more.

What to do if it happens

If you find yourself hydroplaning, stay calm. Don’t brake or turn suddenly. Ease your foot off the gas, and hold the wheel firmly. Do not steer in any direction other than straight. If you do need to brake — and don’t have anti-lock brakes — do so gently with a pumping action.

How to prevent it

Drive slowly and carefully: When it’s raining or there is water on the road take your time around curves and steer and brake with smooth, light touches. Most of America’s roads are crowned, meaning water will run to the sides and puddles will accumulate. So, keep towards the middle of the road and drive in the tire tracks left by cars in front of you.

Be extra cautious at intersections: This is a common location where engine oil and water mix, creating extremely slick spots.

Check your tires: Worn tires will hydroplane more easily for lack of tread depth. Underinflation can cause a tire to deflect inward, raising the tire center and preventing the tread from clearing water. Tires that present the greatest risk are small in diameter and wide.

Add weight: More weight on a properly inflated tire lengthens the contact patch, improving its aspect ratio. This is more important for vehicles hauling unloaded trailers and empty pickup trucks with uneven weight distribution. Caution - weight can actually have the opposite effect if the tire is underinflated.

Avoid using cruise control: There is a chance that your car will accelerate if you hydroplane, and your reaction time will be slower if using cruise control.

Let us know if you have any questions, comments or experiences about hydroplaning below.

When Do I Need to Get Car Insurance for My Teen?

The simple answer is to check with your insurance agent. Each car insurance company has different requirements for adding new drivers. Some require that new drivers are added to a car insurance policy when they first get their permit and others wait until they are licensed.

Should My Teen Have Their Own Car Insurance Policy?

From a risk perspective, teen drivers should have their own car insurance policy. A separate policy for a teen is more likely to keep a teen’s accidents or violations from affecting the parent’s policy. This helps to protect mom and dad’s car insurance price from going up or being cancelled/non-renewed because of a teen driver. Note that for a teen driver to have a separate policy, most car insurance companies require that the teen’s car is solely titled or co-titled in the teen’s name. Also remember that car insurance follows the car. So if a teen gets into an accident while driving the parent’s car, the accident would be on the parent’s policy, not the teen’s.

From a price perspective it is usually cheaper to put a new teen driver on the parent’s car insurance policy. The parents normally qualify for more discounts and have a better insurance score that leads to lower insurance prices. Regardless, have an insurance agent quote a teen driver on their own policy and on the parent’s policy. The price difference may be small and worth separating the risk.

How Can I Keep the Price Low?

Stay Accident and Violation Free – Accidents and violations are the quickest way for a car insurance policy to skyrocket in price. One way to help prevent accidents and violations is communicating about driving tips and setting driving guidelines. Go to Pennsylvania Department of Transportation to share driver safety tips with your teen and learn how parents can effectively teach a teen to drive.

Shop Around – According to the PA Insurance Dept “A good rule of thumb is to get quotes from at least 3 different insurance companies”. Different car insurance carriers rate teen drivers differently and shopping a few different car insurance companies helps ensure the best car insurance solution for your family’s situation. Remember that the lowest price is not always the best solution and make sure to compare “apples to apples” when getting quotes.

Good Grades Matter – Most car insurance companies offer good grade discounts of 5-10% for students with a GPA of 3.0 or higher. Edmunds.com suggests finding out how much you can save if your teenager gets the discount and giving all or a portion of that money back to your teen. This not only provides a reward for academic performance but it motivates the teen to continue to get good grades.

Driver Training Pays – Most car insurance companies offer a driver training discount if a young driver completes a combination of classroom instruction and behind the wheel training from an accredited driver training course. Click here to find a driver training school near Lancaster, PA.

Don’t Finance a Car – Normally the biggest cost for a teen’s car insurance policy is the comprehensive and collision coverage, which covers damage to their car. Financed cars are required to carry both comprehensive and collision coverage because the financing organization wants to ensure that they get their money back if the car is damaged or totaled. The best advice is to buy a used and reliable car with safety features (airbags, ABS brakes, keyless entry) that does not require financing. That way you can choose to add comprehensive or collision coverage and keep the car insurance price reasonable.

If you have any other teen related car insurance questions, please leave them in the comment box below.

This past week J.D. Power and Associates released a new report that rated the car insurance shopping experience for 21 insurance companies. The report gathered responses from over 14,500 shoppers who rated each insurance company based on policy offerings, local agents, call center representatives, insurance company website and price. Below is the summary of the 2010 J.D. Power and Associates report or click here to view the entire report.

The report summary above clearly shows that the car insurance buying experience is not the same for all companies and comparing car insurance quotes solely on price does not tell the whole story. So whether its protecting your family with a new car seat or car insurance, make sure other resources such as 3rd party reports are used to help make the right decision for your family.

What other factors do you consider when shopping for car insurance?

1. The Savings Data Is National- One of the most important pricing factors for car insurance is location. For example, car insurance prices in Lancaster, PA are significantly cheaper than New York, NY. In addition, some car insurance companies tend to have more competitive prices in specific states and even counties. However, most insurance companies use National data to promote their average savings on television and it may not be an accurate picture of how competitive they are on a local level. Car insurance prices are very similar to real estate, it is all about location, location, location.

2. The Savings Data May Not Be Current – I understand that it takes time to compile National savings data for these commercials, however, one car insurance commercial I saw had fine print on the bottom of the screen saying the data was from 2007. Nearly every car insurance company has increased prices since 2007 and some insurance companies have taken double digit prices increases in 2010. Depending on when the last time a car insurance company increased rates, a car insurance commercial even with data from a year ago may be completely out dated.

3. The Savings Data Is Not The Whole Story – My biggest pet peeve with any marketing claim about saving money is that the savings amount is not only part of the story. The other half, and more important part, of the story is how often the savings occurs. A company with just 1 customer who saved $400 per year can make the same claim as another company who saved 10,000 customers an average of $400 per year. However, the only thing talked about in car insurance commercials is the savings amount. If you are shopping car insurance, wouldn’t you want to talk with the company who saves customers money and does it often?

Someone once told me that you can crunch data to make it say anything you want. Keep this mind the next time you see a car insurance commercial and how much you could save if you switch.

NAIC Complaint Data for Erie Insurance Exchange

Insurance is an intangible service. It cannot be sampled, tested, touched or recycled. Thus, most people purchase personal and business insurance on the only tangible factor they can measure…PRICE. Although price is a major factor when purchasing insurance there are other factors that need to be considered when choosing the right insurance company.

One major factor to consider is if people are happy or satisfied with an insurance company. The last thing any customer wants, is to pay an insurance company for months or years and be disappointed when they have a problem or a claim. Thus, the National Association of Insurance Commissions (NAIC) compiles complaint data on nearly every insurance company and the information is available to the public!

5 Simple Steps to Get the Complaint Data

1. Paste the link https://eapps.naic.org/cis/ into your browser

2. Under the Company Search for Complaint and Financial Information section on the top right side of the page, enter your insurance company’s name. Then select PA as the Consumer’s Resident State and click the “Find a Company Button”

3. Click on “Closed Complaints Link”

4. Click on “Closed Complaint Ratio Report”

5. Select the insurance type (Ex-private passenger auto) and click the “Create Report” button

At this point you should have a report similar to the one shown in the picture above. The report shows an insurance company’s complaint ratio compared to a national median of 1.00. Any complaint ratio below 1.00 means the company is better than the median company and any company with a ratio above 1.00 means that they are worse than the median company.

Take advantage of this consumer data and find out what customers are saying about your personal or business insurance company…you may be surprised!

Your credit score is extremely important these days. Like your social security number, your credit score follows you wherever you go, whether it’s to get a mortgage, apply for a car loan, purchase insurance or even to get a job. So naturally, if you know how to check your credit and if you’re armed with tips on how to improve your credit score, you will be in better shape than someone who isn’t.

Main Factors That Affect Your Credit Score

- Your payment history. The most important factor to a potential lender is whether or not you will pay your bills in full and on time. The more recent your good (or bad) payment history, the more important it will be for your credit score.

- Your outstanding debt. The more credit cards you have that are maxed out, the lower your score will be. Try to keep your credit card balances at 25 percent or less of your limits.

- The length of time you’ve been building credit. The longer your credit history, the higher your credit rating.

- The number of inquiries on your credit report. The more times you’ve applied for credit cards or loans, the more credit report inquiries will show up on your credit report. A higher number of credit report inquiries may indicate that you’re struggling financially. However, there is also a myth about inquiries. All inquiries received with a 14 day period are seen as a single inquiry; shopping for credit several times throughout the year can raise a red flag. So, for example, it does not hurt when you have an auto dealer have several banks check your credit when you buy a new car.

- Steady employment. People who are steadily employed are viewed as being better able to pay their bills on time.

- Late or missed payments

- Using more than 80 percent of your total amount of available credit

- Bankruptcy, liens or foreclosures

9 Ways to Improve Your Credit Score

1. Review your credit report for any errors and correct glitches that may not be accurate (but are still hurting your current score). You can obtain a free copy of your credit report by visiting www.CreditReport.com.

2. Refrain from opening a lot of new accounts over a short period of time, especially if your credit history is on the shorter side to begin with.

3. Pay your bills on time.

4. Don’t open any credit lines you probably won’t use. For example, don’t open a lot of store credit cards just to get the initial 10 percent discount.

5. Instead of moving credit card balances to lower rate cards, try to pay them off. Transferring balances can change the ratio of your total credit card balances to your total available credit lines, hurting your credit score.

6. Open a few new credit accounts, use them responsibly, and make your payments on time.

7. Try to use your credit cards less. Even better, pay them off every month. The bigger the space between your total credit limits and the balance you carry, the better.

8. Contrary to what you may have heard, don’t close old, paid-off accounts. Credit companies used to advise people to close old credit cards they were no longer using. But closing these cards shortens your credit report and makes you seem less credit-worthy.

9. Avoid bankruptcy. Declaring bankruptcy is one of the worst things you can do for your credit score. It may seem like the easy way out in the short term, but over time it will cost you tons in the way of high interest rates.

Overall, keep in mind that negative items on your credit report are a lot more powerful than positive items. A late payment can affect your score in a month or two, while making payments on time can take six to 12 months to improve your credit rating. Also remember that having too much credit can be as bad as not having enough, if your credit has been mismanaged.

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To help determine if raising your car insurance deductible is a good financial decision, you need to analyze the payback period.  The payback period is how long it would take to buy back your deductible from insurance premium savings. It can be calculated in 4 simple steps and is best explained by using an example.

Assume that our friend Mr. Fancypants is paying $1000 per year for car insurance and he currently has a $250 collision deductible on his car. To save money, Mr. Fancypants wants to increases his collision deductible to $500 making his auto insurance drop to $900 per year. Is raising Mr. Fancypants collision deductible the most economical decision using the payback period method?

Step 1: Calculate Retained Risk – When you raise your deductible that means you will pay more out of your own pocket before the insurance policy starts to pay.  Originally Mr. Fancypants would pay the first $250 for a collision claim but raising his deductible means he would now pay the first $500. Thus, Mr. Fancypants is retaining $250 of additional risk by increasing his deductible. (Learn more about retained risk in our prior blog article)

New Deductible – Original Deductible = Additional Retained Risk
$500 – $250 = $250 (Additional Retained Risk)

Step 2: Calculate the Savings – Since Mr. Fancypants is retaining more risk, the car insurance policy goes down to $900 per year and he saves $100 per year.

Original Premium – New Premium = Savings per Year
$1000 – $900 = $100 (Savings per Year)

Step 3: Calculate Payback Period – The payback period in this example is how long Mr. Fancypants would have to drive without having a covered collision claim to make his money back. It is calculated by dividing his additional retained risk (Step 1) by the additional savings (Step 2) for raising his collision deductible.  For Mr. Fancypants, he would have to drive 2.5 years without a covered collision accident claim before he would make his money back from the savings on his policy.

Additional Retained Risk / Savings per Year = Payback Period (yrs)
$250/$100 = 2.5 years

Step 4: Compare Payback Period – Since Mr. Fancypants does not actually know how long he will drive without having a collision accident, he needs a guideline to help make a decision. A general rule of thumb is if the payback period is less than 4 or 5 years, it usually makes financial sense to increase your car insurance deductible. Since the payback period for Mr. Fancypants is 2.5 years, the payback period method suggests that he should raise his deductible.

Remember that the payback period is just one guideline for making the decision to raise your insurance deductibles. Other factors to consider would include your likelihood to submit a car insurance claim, if you have the cash to pay the higher deductible and your prior driving record just to name a few.

Have you used the payback period to determine if your car insurance deductible are the most economical? Leave a comment below.