We recently blogged about the fiscal liability dangers of those of us raising teenage drivers. We think it is fairly easy to see the financial liability risks associated with the novice teenage driver, the distracted (texting teenage driver), and the driving under the influence teenage driver.
Parents, you are ultimately financially responsible for those acts. But it is not just these huge acts of childhood irresponsibility than can reek havoc upon your wealth. You can go broke as a result of comparatively innocent childhood irresponsibility. This blog chronicles a real-world example of this. .
This real-world case study from my files about two teenage pranksters with its whopping $620,000 claim can help illuminate things.
Zack, 13, couldn’t believe his luck: Discovering leftover Fourth of July fireworks in the garage just in time for Halloween. He couldn’t wait to tell his best friend, Fletcher, 12.
While their parents were soundly asleep on Halloween night, the inseparable pair snuck out to give the neighborhood a midnight treat. Suppressing giggles, Zack lit the inaugural bottle rocket — it zoomed off-course and landed underneath their neighbor’s car.
The friends rushed over to try to kick it out, but they were too slow — the car caught on fire in moments and as they looked on in disbelief, the tree in the yard and the home soon followed. By the time firefighters were at the scene, extensive damage was already done.
Because of “vicarious parental liability,” Zack’s parents are on the hook legally, even though they weren’t present and didn’t know what he was up to.
After their homeowners liability limit was exhausted, their standalone personal umbrella policy covered the rest of the damage. Without the umbrella, their assets, including future earnings, were at stake.
The bottom line conclusion here. If you own kids, owning an umbrella insurance that covers youthful irresponsibility beyond your homeowners liability limits is highly advised. Call us anytime to discuss the wide range of Umbrella insurance options.