Top 3 Reasons Why You Need a Personal Umbrella Insurance If You Have a Teenage Driver

Jan 14, 2021 | Personal Insurance

As parents continue to worry about their teens becoming drivers. Personal Umbrella Insurance in Denver, Colorado (or any other state in the US) just might really be something of a default add-on to their auto insurance policy.

You and your teen driver

Have kids, they say. It will be awesome with kids around, they say. They were right… until the kids learn to drive and go off on their own… and then it is another story.  What is it with teenagers getting behind the steering wheel and you as a parent or a guardian getting in financial trouble? If you are a parent with a teenage kid who is starting to drive on his own, you better have yourself covered with personal umbrella insurance. Otherwise, better be prepared to risk getting bankrupt. Unfortunately, this couldn’t be more true. 

Preparing your teenager for mobility

Now as a parent or a guardian, you of course would like to still prepare your kid for his independence via mobility. For you to do that, best to prepare yourself first. Otherwise, you wouldn’t be able to be of much help to your teenage kid. The question is, how prepared are you? 

A Scenario with a Teenage Driver

It’s Friday night and 17-year old Tony Dowell is on a date with his high school crush Stacy. He picks her up from her house and they agree to see a movie together. Unfortunately, they were running late already since Tony had to finish his shift from a part-time job he has after school. Tony decided to speed down a little along the highway. He didn’t see an oncoming car around the blind curb. He crashed directly into the car and the impact made both vehicles swerve violently.

Tony suffered broken bones all over and had to be in therapy while recuperating. Stacy remained comatose for more than a month. The couple in the other car was not as fortunate. The husband passed away after a week while the wife was left with a permanent disability. 

Tony’s parents, fortunately, decided to get a personal umbrella policy for the family long before this incident. This helped them cover all the medical expenses of Tony, Stacy, and the couple. 

Now the question is, are you as prepared as Tony’s parents?

Teenage drivers and vehicular accidents

The second leading cause of death for US teens in recent years involved motor vehicle accidents based on a report published by the Centers for Disease Control and Prevention. Almost 2,500 teenagers aged 13-19 died and around 285,000 had to be treated for serious injuries involving vehicular accidents in 2018 alone. That is around seven teeners between the ages of 13-19 were killed due to these accidents alone. 

The age group of 16-19 registered highest among all other age groups as they are three times most likely to suffer in a fatal crash. 

Teenagers at risks are further categorized into the following groups:

Males

Immaturity or their feeling of being invincible, many kids between the ages of 16 to 19 years old have increased over the years. Popular film franchises like “The Fast and the Furious” featuring street or drag racing, have started to take roots in some neighborhoods. The idea of “the faster, the better” cult is increasing and encourages teenage males to participate in these unsafe stunts.  

A teen-driving with other teen passengers 

In another study, it showed that around 52% of vehicular deaths involving teens happened with another teenager on the wheel. An unsupervised teenage driver is most likely to get distracted by the presence of each individual teenager on board. 

A teen with a new driver’s license

The chance of a teenager to figure in a crash is most likely to be high with the first month of getting his license. Full throttle! You only live once! A driver’s license and their own car can sometimes give a false sense of security to teens and puts them at high risk by showing off. The National Household Travel Survey listed them as between the ages of 16, 18, and 19 years old. 

Threats faced by teenage drivers

Inexperience

Teens being young are less likely to fear dying. This feeling of invincibility may push them to get reckless and uncaring. Further, this could also hinder their critical thinking, particularly when faced with making decisions in a snap, which could, unfortunately, put them in grave danger.

Weekends and nighttime driving

Driving around in the dark during nighttime and with less traffic especially on weekends can either put the driver on defensive mode. It may also put him in a pensive mood. According to the same study, about 37% of motor vehicle accidents which resulted in both teenage drivers and passenger deaths were recorded to happen from Friday to Sunday and between 9 pm and 6 pm. 

Non-observance of protocols

Seatbelt.
Around 43.1% of high school students in the US in 2019 do not wear seatbelts most of the time, especially if they are the passengers. According to statistics in 2018, most of those who were killed in car crashes were not restrained with seatbelts.
Distracted Driving.

According to the 2019 National Youth Risk Behavior Survey, 39% of high school students who drive in the US have at least once within the 30-day interval of the study, deliberately used their mobile phones for texting or sending emails even while driving. This result further cements the reality that drivers, especially teenagers, still do other tasks even when they are driving despite knowing the possible repercussions. 

Speeding.

A teenager in a speeding car is a lethal combination. This devil-may-care attitude also excites them not just to speed up but also to go for shorter distances between his own car and the one in front of him (headway). In 2018, most of those teenage drivers who figured in fatal vehicular accidents were due to over speeding. 30% of the males were 15-20 years old and 18% of the female drivers were from the 15-20 years old age group. This is the highest percentage when compared to other age groups per gender during that period.

Alcohol Use.

“Don’t drink and drive. Don’t drive and drink.” With sane and clear minds, as lives have been lost due to the toxicity of alcohol, lives can be saved. Needless to say, taking in any amount of alcohol before going behind the steering wheel increases the chance of getting into an accident – not just for older and experienced drivers, but more so for teenage drivers.

Drowsy, reckless, and impaired driving

While being drowsy is not necessarily a crime, it can put your passengers or other people coming along your path at risk. And that is where the problem can start. Driving while drowsy can be as dangerous as driving while drunk. It could be a result of sleepiness or fatigue. Dozing off while driving can effectively cause a fatal crash. 

Setting up your protection plan

It may be true that you have your own insurance coverage for your family. You may even have your life insurance, health insurance, long-term disability, homeowners, and auto insurance. This could also be on top of the coverage included in your employee benefits package, or if you’re a business owner – your other policies for your business.  Since our immediate concern right now is your teenage driver, let us focus first on maximizing your coverage for your kid.

A teenage driver is equivalent to another car that will need coverage, right?  Being one of the four insurance coverage everyone should make sure he has, best to understand the basics of Auto Insurance

Don’t be another statistic

The National Highway Traffic Safety Administration reported that in the US alone, there were an estimated 6.7 million car accidents in 2018.  In 2019, an estimated 38,800 people were killed in car crashes.  Auto accidents are the number one killer for Americans aged 5-24 according to the CDC data.  More than 2.7 million drivers and passengers were injured in 2018. Around $242 billion were lost due to auto accidents which resulted in deaths and injuries in 2010. 

Some states do not require drivers to have auto insurance, but most have rules on financial responsibilities in case of accidents.  For those that require it, as the State of Colorado, fines can be stiff until you get coverage.   The first offense is a minimum $500 fine, and license suspension until proof of coverage is presented to the Division of Motor Vehicles.  

The second offense is a minimum $1,000 fine and license suspension for four months. 

Third and subsequent offenses are a minimum $1,000 fine and license suspension for eight months.

To date, only New Hampshire and Virginia remained as the only states that do not require insurance coverage for car owners in the whole US. Vehicle owners may opt to just post cash bonds in New Hampshire. An uninsured motor vehicle fee may be settled in Virginia.   In the long run, however, it is much beneficial for car owners to get auto insurance – especially if you have an accident. Financial burden may be eased out. The auto insurance will cover the expenses, protect you from litigation. It will also protect your vehicle from theft, vandalism, or natural disasters.   

But the next question is, given you have your teenage driver to consider now – is this going to be enough?

The Personal Umbrella Policy

Tony Dowell’s accident claimed the life of one of the victims, left the wife in permanent disability, his girlfriend comatose and he himself in a bad condition. Will his parents’ auto insurance coverage be enough to compensate for everything? Given the extent of the injuries and sufferings, everyone suffered, probably not. Good thing his parents have the foresight to add a Personal Umbrella Insurance policy on top of their auto insurance — and this gave them a lot of headroom. 

Regular liability insurance aims to protect the insured from any litigation due to injuries and damage to people and/or property. It is normally embedded within the auto, home, and renters insurance. Umbrella Insurance is a form of liability insurance. However, it covers a much higher limit beyond the embedded liability coverage of auto insurance. It goes above and beyond the claims relating directly to the standard (ex: auto or home) policy.

The Personal Umbrella Insurance Policy aims to protect your assets from any unanticipated events. An example is a tragic accident in which you or your teenage driver is held directly responsible for the damages or injuries. Further, the Umbrella Insurance will also cover the damages in case of litigation up to the policy limit. This additional coverage can also protect you as the policyholder from false arrest, even libel, and slander. One thing it does not do however provides protection for damages to the policy owner’s own home, car, or possessions. 

Why should you really have to consider getting umbrella insurance now?

Having a teenage driver in the household puts you, the parent at a greater risk. After all, things being considered, here are the top three reasons why should get umbrella insurance now:

Additional coverage.

An accident is just what it is – it can happen anytime, even to the most careful person. In general, teenagers have the tendency to feel their invincibility, whether you like it or not you need to be prepared. Your current auto insurance liability policy may not be able to provide enough coverage when you need it the most.

Wider scope.

This supplemental coverage allows all licensed drivers in your household, including your inexperienced teenage driver, to be included in the policy.

Protection of your assets.

Litigation and recuperation after an accident can take time. Expenses may go beyond your auto insurance policy’s liability limit. The umbrella insurance can protect you by covering the excess beyond your standard policy’s limit.

Having the umbrella policy shields you from selling off your properties, or cashing in some of your other policies just to settle remaining claims from your own pockets.

The Bottomline

Indeed, it may cost you much more to get a Personal Umbrella Insurance policy— on top of your standard auto insurance policies. However, if you look at it deeply you can see that the benefits outweigh the cost. In the long run, it will be more beneficial to you. Remember, you are not just protecting yourself and your assets but your teenage child who is now behind the steering wheel of his car.

Call us today!

For more information about Personal Umbrella Insurance and the like, please contact us. We’ll be more than glad to assist you.