Top 2 reasons you need Personal Umbrella Insurance if you have a Teen Driver

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 a car 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 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 what happened- the car accident

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 an Ohio personal umbrella insurance policy at the same time he purchased the personal auto and homeowners policies.

What happened AFTER the accident

When the claim was submitted under our customer’s auto policy, the carrier automatically opened a claim under the personal umbrella insurance policy. Why? They also know a claim of this severity will equal high medical bills.

UPDATE: The claim was finally settled for $286,000 under the auto policy and $750,000 under the umbrella for a grand total of $1,036,000. Yep- you’re reading that right- over 1 MILLION dollars.

The top 2 reasons you need Ohio personal umbrella insurance if you have a teen driver

Reason 1

In the absence of that personal umbrella insurance policy, the insured would have had to pay the additional amount beyond the bodily injury limit of $250,000 per person and property damage limits of $100,000. 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. In this case, once the $250,000 and/or $100,000 is used up, the insurance company is done and you are left to pay the balance out of your own pocket.

Let’s do some quick math- you potentially have $350,000 available on the auto policy (250,000 + 100,000). The claim was 1.036 million. That would leave you with $686,000 to pay out of your pocket. YIKES!

Reason 2

Following this line of thought, many people would have a tough time paying that balance. 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 will lose big time.  

Teen driver car 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

How much does it cost to include a teen driver on a personal umbrella insurance 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 ($686,000!!!!!!!) =. And don’t say “It’ll never happen to me”, because it does. The family mentioned here is just 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 fill out the form below and we’ll be happy to review your insurance and take away your worry.​

If you’re interested in reading more about Ohio personal umbrella insurance, here’s an additional helpful article:

What Is Not Covered Under a Personal Umbrella Insurance Policy?

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