Part of growing up is getting one’s driver’s license and gaining the freedom to go wherever you like. But, unfortunately, it is also a time in which you, as parents, take on an additional liability as you become responsible for your child’s actions when behind the wheel.
In Wisconsin, in most cases, a parent, stepparent, or other adult sponsor is required to sign as a sponsor for the new driver. Being a sponsor includes becoming jointly and severally liable for negligence or willful misconduct while behind the wheel. So, what does jointly and severally liable mean? It means that you are individually and collectively liable. In other words, if your new teen driver injures someone or causes property damage, you are just as liable as they are.
The good news is that your liability as a sponsor is limited to $300,000 for any one accident or the limits of any insurance coverage provided to the minor under the parent’s or adult sponsor’s applicable insurance policies, whichever is higher.
However, before you breathe a sigh of relief, let’s look at a scenario where your new teen driver was at fault in an accident that killed the driver.
If a jury awarded $300k for Wrongful Death, and If you carry 500 Combined Single Limits, you have enough coverage. However, if you carry 250/500 Bodily Injury limits or less, you would fall short and personally be on the hook for the balance.
So how do you remedy this situation? A Personal Umbrella would solve your problem. An umbrella policy picks up where your underlying limits leave off. You can have a Personal Umbrella Insurance Policy with limits of one million dollars or more for as little as a couple hundred dollars.
The takeaway is that you may be a great driver, but having a new teen driver in the household has its risks.
If you have questions or want a quote for a Personal Umbrella policy, give us a call.