Every so often, we have to do things that we would rather not do, if we had the option. For me, going to the dentist every six months to get my teeth cleaned falls into this category. During my dental visit yesterday, my hygienist told me about her son who just turned sixteen. "He now has his driver's license, and we bought him a Jeep," she told me with some anxiety in her voice. Having younger children myself, this peeked my curiosity.
She went on to tell me that they had titled the Jeep in her and her husband's name and added the son to their car insurance policy. At this point, the lawyer in me came alive. "Do you understand that if he gets into a wreck and hurts someone, you could get sued," I asked? She looked surprised, and said, "you've got to be kidding? How?" Most people do not understand how they can be legally liable for their children's actions behind the wheel. In North Carolina, the title owner of a vehicle is legally liable for the negligent acts of another family member (e.g. a teenager) under the Family Purpose Doctrine. This rule says that if the car is provided by the owner for the general use of the family, then if another family member causes a wreck, the title owner is also liable. Plain English translation: if the parent owns the vehicle, and the teenager causes the wreck, then the parent owner can get sued. So, what should the parent do?
First, if you're going to buy your new teenage driver a car, title the vehicle in the teenager's name. Make it the teenager's car, legally. Second, do not add the teenager to your own auto insurance policy. Either buy them their own policy, or make them buy their own car insurance policy. It will cost a little bit more, but it will be worth it down the road, especially when your teen driver has that first little fender bender.
Historically, teens have justifiably earned a bad rap for their actions behind the wheel. Motor vehicle crashes have long been the leading cause of death for 15- to 20-year-olds, according to the National Highway Traffic Safety Administration. In 2008, the UNC Highway Safety Research Center in Chapel Hill reported that 197 North Carolina teenagers were killed in car crashes and almost 20,000 were injured.
"What about insurance asked my hygienist?" I told her, "you should have an umbrella policy." Whether you keep your teen on your own policy or buy them their own, you should have an umbrella policy. This is both for liability purposes (if you get sued), and if you get into a wreck with someone who either does not have any car insurance or does not have enough to cover your injuries if you get hurt. Ideally, your umbrella policy should be for at least $1 Million. Umbrella policies are relatively cheap, given their cost and your potential risk if you get hurt by someone without enough insurance coverage.
At Davis Law Group, we see seriously injured people on a regular basis who are victims twice. First they were unlucky enough to be injured in a car wreck, and second they happened get into a crash with someone who did not have enough car insurance, and the injured person failed to protect themselves by purchasing enough under-insured motorist (UIM) coverage. When this happens, the injured person is not going to recover fair compensation for their harms and losses. In fact, in many instances, the injured person will not even be able to cover the medical bills with the car insurance proceeds.
In North Carolina, the minimum amount of auto liability insurance coverage a person must have by law is $30,000. This is not enough if someone gets seriously injured and has to spend more than just a few hours in the hospital. So, how should you protect yourself? You should contact your insurance agent, and make them tell you how much under-insured coverage (UIM) you have. If you have less than $100,000, then you need to increase your UIM coverage to at least $100,000. The premium difference will be less than the cost of a dinner out with the family. If you are financially able, you should purchase a $1 Million umbrella policy that covers both liability and UIM.
If you have questions about insurance coverage or how you can protect yourself and your family, feel free to give me a call.