Protecting Your Wealth When Insuring a Teen Driver
Your most significant asset in life is your family. As a result, you’ve purchased many different types of insurance policies over the years – life insurance, health insurance, disability insurance, etc. to protect against unforeseen losses of income or health.
Now that your teenager has their driver’s license or is just about to get one, your attention has probably turned towards your auto insurance. Your teen’s health is covered by health insurance in the event of an accident, in addition to any medical payments that the auto insurer pays. But what about your liability from an accident at which they were at fault?
Did you know that if your child is at fault in a collision with a pedestrian or another vehicle, that party can file a lawsuit and be awarded assets that you, the parent or guardian, own personally?
Doesn’t Liability Insurance Protect You?
Your automobile policy has liability protection built into it. Still, you can find yourself underinsured through the neglect of an agent selling you an inexpensive auto policy or liable for charges that exceed even those of a high-limit policy sold to you properly by an agency that specializes in working with high net worth clients.
What Can You Lose?
You’re not going to like the answer to this question: just about everything. A law firm suing you can request documentation concerning everything you own, and you have to provide it. You’ll be asked to provide accurate and up-to-date information for your:
· Checking and savings accounts
· Partnership agreements and records of partnerships
· Real estate (including timeshares)
· Contents of all safety deposit boxes
· Title to all properties
· Complete list of jewelry, art objects, and personal property
How Will Opposing Attorneys Know About Your Assets?
A creditor (attorney) can compel you to appear in court for an asset hearing. At that hearing, the creditor can question you while you’re under oath about your assets and demand that you produce documentation regarding your wealth and ability to pay.
If you fail to appear at an asset hearing, a bench warrant can be issued for your arrest. The creditor can then request a cash-only bond in the amount of the judgment, which can cause you to be held in custody until the judgment is paid in full.
How Can you Protect Yourself?
There are a few things you can do to protect yourself and your possessions when you’re being sued.
First, have competent legal counsel. They’ll know, for example, if your state protects homes from being seized in a judgment under a homestead exemption or if you should protect yourself, if you’re married, by owning your home as “tenants by the entirety.”
Next, make sure you have the highest limit auto insurance that you can buy. You may not want to pay a higher premium for higher limits, but you won’t think about the cost if you’re facing a lawsuit because of your teen’s auto accident. Again, a Kelly Klee advisor can evaluate your current coverage and make appropriate recommendations if it needs to be strengthened.
Last, be protected by umbrella insurance with at least $5 million of protection. Umbrella insurance provides you with extreme protection, including uninsured/underinsured liability for up to $10 million, and which will pick up where your auto policy leaves off by paying from the first dollar of a loss.
Call us today at (844) 885-1600 to talk about umbrella insurance that all high net worth individuals should have, especially with teen drivers, or get started here. We’ll customize your coverage for you to have the finest protection available.