I’m going to be honest- this is one of those articles I NEVER wanted to write. There is nothing good that comes when a teenage driver you insure is killed in an auto accident. It is the most horrific situation I’ve ever experienced in my many years of being in the insurance business.
The reason I AM writing it is simple: to share the story so parents of teenage drivers can make their insurance program the best it can be should, God forbid, the same thing happens to them. Because I can think of no worse thing than losing your child in an auto accident AND having to be concerned whether you have enough insurance coverage, AT THE SAME TIME.
Here’s the story:
It was a pleasant fall day, with decent visibility. Our insured’s teen driver was on the road. For reasons still unknown, he went left of center and hit an oncoming car. Our driver was killed instantly. The other driver was severely injured, and was flown to a high level trauma center for multiple bone fractures and internal injuries. Although I don’t know all of the details, I’m pretty certain there were many surgeries and a lengthy stay in the hospital. I’m very certain there will be significant rehab for many years. So it doesn’t take much effort to figure out that the cost of this medical care will easily reach into the hundreds of thousands.
Luckily, our customer had taken our advice and purchased a personal umbrella policy when he purchased the personal auto and homeowners.
What happened after the accident:
When the claim was submitted under our customer’s auto policy, the carrier automatically opened a claim under the umbrella policy. Why? They also know a claim of this severity will equal high medical bills.
At last look, the claim was opened for the entire policy limit of $250,000 per person bodily injury and another $100,000 under the umbrella. Fuzzy about the details of a personal umbrella? You can read our article What Is Personal Umbrella Insurance and How Does it Work to get up to speed.
The 3 reasons you need personal umbrella insurance if you have a teenage driver
1) In the absence of that personal umbrella policy, the insured would have had to pay that $100,000 out of pocket. WHAT????? Yep, a policy limit is a limit. So if the accident is bad enough that it uses up the limit, once that limit is reached the insurance company’s obligation is finished. They can walk away and you are left to pay the balance out of your own pocket.
2) Following this line of thought, many people would have a tough time just coming up with $100,000 to pay the balance of the claim. What does a person do? Start selling things to raise the money. Perhaps things like a motorcycle, boat, camper, vacation property, vehicles, or at worst, your own residence. You may have to cash in retirement accounts. Wages may have to be garnished to pay what’s owed. You can come up with a million scenarios, but no matter the situation, the end result is you losing something.
3) And of course, the claim is not settled yet and won’t be for some time. The final payout could be far greater than initially thought. The good thing is that the umbrella goes up to $1 million. Of course, the amount could still exceed $1 million, but it does give a level of comfort that wouldn’t be there otherwise. The parents are trying to grieve the loss of their son- again, worrying about proper insurance coverage should NOT be one of their many worries at a time like this.
Teen driver accident facts:
It’s been well documented that teenage drivers have some of the worse accident statistics- they are involved in the most crashes and the most severe ones. Reasons are plenty- lack of driving experience, distractions, alcohol or drugs, belief they’re invincible, etc. But no matter the reason, it’s not a question of if, but when, the accident happens. Here's a few of the most sobering facts:
- In 2016, there were 1,908 young drivers 15-20 years old who died in motor vehicle crashes.
- In 2016, drivers who were involved in fatal crashes made up 39% of the fatalities in those crashes.
- Of those passengers who died in crashes with young people who were driving, 64% were also 15-20 years old.
These statistics were pulled from the 2016 Traffic Safety Facts publication courtesy of the National Highway Traffic Safety Administration. You can read the full report on the NHTSA website.
So how much does it cost to include a teenage driver on a personal umbrella policy?
Ok, we know that deep down inside you understand what we’re saying, but if it costs a million to get a million, that just isn’t doable. Although premiums vary by insurance company, we typically see a cost of $100 per year per teenage driver. If we break that down per month, that’s less than $9 per month.
That’s it. So although, yes, this is a cost to you, think about the cost to you in the absence of the personal umbrella, like the story above. And don’t say “It’ll never happen to me”, because it does. This recent event is a prime example of it happening to a regular, everyday family.
Do you have a teen driver and are concerned that you don’t have the right insurance protection for your family? Call us at (937) 592-4871 or visit our website and we’ll be happy to review your insurance and get quotes that take away your worry.