# Insurance question - umbrella policy **URL:** \ **Category:** Factual Questions\ **Created:** [September 13, 2006, 12:31am UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480 "2006-09-13T00:31:30Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [September 13, 2006, 12:31am UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/1 "2006-09-13T00:31:30Z")
My wife and I have an umbrella insurance policy, primarily to protect our personal assets - house/savings/etc. - in the event of a legal claim against us. We recently were informed that our annual premium was increasing $260. When we asked why, they said because we have teenage drivers. That doesn’t seem quite right to me. I believe in my state parents have limited liability - $25G I think - for their kids’ negligence. But I don’t see why **my** assets would be at risk in the event of my **kids’** negligent acts. They are covered under our car insurance, but beyond that, they are essentially judgment-proof to the extent that they have limited assets to go after. I guess a plaintiff could try to sue me for negligently entrusting my car to my kid, which would be a claim against me that the umbrella policy would cover. When I spoke to the insurance agent she said “Everyone pays this.” I got the number for the underwrites and will speak withthem tomorrow. Or look elsewhere for my umbrella policy. Am I missing something? ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [September 13, 2006, 12:41am UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/2 "2006-09-13T00:41:49Z")
Yes. They can charge what they want within the state regulations and you are unlikely to be able to get out of it at least with your current company. There is probably some threat of someone suing you anyway for something your kids were involved in and they would have to pay expensive costs to defend. ---
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [September 13, 2006, 12:55am UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/3 "2006-09-13T00:55:12Z")
[QUOTE=Shagnasty] There is probably some threat of someone suing you anyway for something your kids were involved in and they would have to pay expensive costs to defend. [/QUOTE] The specific thing the mentioned was teen driving, not general teen negligence or malfeasance. WI probably wouldn’t have even made the call if it had been less than $100, but $200 a year adds up, especially if it is insuring me against a nonexistent risk. Gonna have to see if all companies are like this. ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [September 13, 2006, 1:04am UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/4 "2006-09-13T01:04:13Z")
It may be a round-about way to punishing you for having _crazy teenagers_ at all. Actuaries are pretty wily and maybe they needed to come up with a way to charge for the increased? risk associated associated with them. I almost blew up/burned down my house a few times during that period. ---
**Author:** ![Inigo\_Montoya](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/inigo_montoya/32/124_2.png) [@Inigo\_Montoya](https://boards.straightdope.com/u/Inigo_Montoya)\ **Post date:** [September 13, 2006, 2:45pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/5 "2006-09-13T14:45:18Z")
[QUOTE=Dinsdale] I believe in my state parents have limited liability - $25G I think - for their kids’ negligence. [/QUOTE] That sounds flaky. Talk to a lawyer in your state for clarification on what statute it is that protects you from the actions of your minor children. It would _really_ suck to find out you’ve made decisions based on a misunderstanding of your personal risks! Not saying it’s not true as you’ve posted it, only that it doesn’t sound right. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [September 13, 2006, 3:18pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/6 "2006-09-13T15:18:05Z")
> [@](#): > > 343.15 > 343.15 Application of persons under 18; liability of sponsors; release from liability; notification of juvenile violation. > > 343.15(1)(a)pdf icon > (a) Except as provided in sub. (4), the application of any person under 18 years of age for a license shall be signed and verified by either of the applicant’s parents, or a stepparent of the applicant or other adult sponsor, as defined by the department by rule. The application shall be signed and verified before a traffic officer, a duly authorized agent of the department or a person duly authorized to administer oaths. > > 343.15(1)(b) > (b) The adult sponsor under par. (a) shall sign and verify on the application that the person under 18 years of age is enrolled in a school program or high school equivalency program and is not a habitual truant as defined in s. 118.16 (1) (a), has graduated from high school or been granted a declaration of high school graduation equivalency or is enrolled in a home-based private educational program, as defined in s. 115.001 (3g). > > 343.15(2) > (2) > 343.15(2)(a) > (a) In this subsection, “custody” does not mean joint legal custody as defined in s. 767.001 (1s). > > 343.15(2)(b)pdf icon > (b) \*\*Any negligence or willful misconduct of a person under the age of 18 years when operating a motor vehicle upon the highways is imputed to the parents \*\* where both have custody and either parent signed as sponsor, otherwise, it is imputed to the adult sponsor who signed the application for such person’s license. The parents or the adult sponsor is jointly and severally liable with such operator for any damages caused by such negligent or willful misconduct. (Emphasis added.) [http://folio.legis.state.wi.us/cgi-bin/om\_isapi.dll?clientID=113283&hitsperheading=on&infobase=stats.nfo&jump=343.15&softpage=Document#JUMPDEST\_343.15](http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=113283&hitsperheading=on&infobase=stats.nfo&jump=343.15&softpage=Document#JUMPDEST_343.15) ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [September 13, 2006, 3:37pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/7 "2006-09-13T15:37:39Z")
[QUOTE=Inigo Montoya] That sounds flaky. Talk to a lawyer in your state for clarification on what statute it is that protects you from the actions of your minor children. It would _really_ suck to find out you’ve made decisions based on a misunderstanding of your personal risks! Not saying it’s not true as you’ve posted it, only that it doesn’t sound right. [/QUOTE] Actually, many states cap parental vicarious liability for children’s torts. For example in WI, section 895.035(4) says; > [@](#): > > (4) Except for recovery under sub. (4a) or for retail theft under > s. 943.51, the maximum recovery under this section from any parent > or parents may not exceed $5,000 for damages resulting from > any one act of a juvenile in addition to taxable costs and disbursements > and reasonable attorney fees, as determined by the court. > If 2 or more juveniles in the custody of the same parent or parents > commit the same act the total recovery under this section may not > exceed $5,000, in addition to taxable costs and disbursements. > The maximum recovery from any parent or parents for retail theft > by their minor child is established under s. 943.51. > **[Wisconsin Statutes Table of Contents](https://docs.legis.wisconsin.gov/statutes/prefaces/toc)** ---
**Author:** ![Inigo\_Montoya](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/inigo_montoya/32/124_2.png) [@Inigo\_Montoya](https://boards.straightdope.com/u/Inigo_Montoya)\ **Post date:** [September 13, 2006, 3:58pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/8 "2006-09-13T15:58:01Z")
Wow. Just wow. Never came accross that one. Okay, uh…I have no answer for the OP. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [September 13, 2006, 4:05pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/9 "2006-09-13T16:05:04Z")
343.15 appears to trump the other statute in the case of conduct involving vehicles. The $5K limit only applies to liability imposed under section (895.035). Also, 895.035 only applies where the parent is not already liable at common law, so a person injured by a child can probably still argue negligent entrustment or negligent supervision, among other things. ---
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [September 13, 2006, 4:13pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/10 "2006-09-13T16:13:38Z")
Interesting, **Gf**. I failed to find anything similar in a quick scan of the IL stats on Westlaw, but that doesn’t mean it doesn’t exist. Researching state law is not my fave activity… My mention of $25G came from a discussion with another lawyer who claimed knowledge of such things, but I haven’t researched it yet. ---
**Author:** ![Inigo\_Montoya](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/inigo_montoya/32/124_2.png) [@Inigo\_Montoya](https://boards.straightdope.com/u/Inigo_Montoya)\ **Post date:** [September 13, 2006, 5:09pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/11 "2006-09-13T17:09:23Z")
[QUOTE=Gfactor] …so a person injured by a child can probably still argue negligent entrustment or negligent supervision, among other things. [/QUOTE] Mmmmmmmmmmyeah, I suppose they could _argue_ that. A bit like hunting elephants with a .22 but if it’s all you have I guess it’s all you have. Law is weird. ---
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [September 13, 2006, 5:10pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/12 "2006-09-13T17:10:46Z")
Looks like the parental limit in IL is $20G. 740 ILCS 115/5. Still haven’t found an IL counterpart to the WI stat, although IL has recently passed a law that parents are civilly liable for damages caused by their kids who trespass upon farmland in a motor vehicle. Not a whole bunch of farms around where I live… ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [September 13, 2006, 6:16pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/13 "2006-09-13T18:16:13Z")
Ah, I was citing WI law, because I misunderstood a previous post. [QUOTE=Dinsdale] Looks like the parental limit in IL is $20G. 740 ILCS 115/5. [/QUOTE] And that statute only imposes liability on parents for their children’s “wilful or malicious” acts–not negligence. I don’t have time to research Illinois parental liability at common law, but maybe \*\*Random \*\* will stop by and set us straight. > [@](#): > > Still haven’t found an IL counterpart to the WI stat I took a quick look and didn’t find anything either. ---
**Author:** ![Billdo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/billdo/32/315_2.png) [@Billdo](https://boards.straightdope.com/u/Billdo)\ **Post date:** [September 13, 2006, 6:16pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/14 "2006-09-13T18:16:35Z")
It sounds to me like the issue is that you have teenage drivers who will likely be driving cars owned (and insured) by your wife and you. Under most states’ automobile liability laws, the owner of an automobile is liable for all liability of an authorized driver of that automobile (i.e. someone who didn’t steal the car). That means that if your teenagers get into an accident with your car, you will be liable as owner. The reason for this is tied into auto insurance. The owner is liable because the owner should have auto insurance, which covers all authorized drivers, so that the insurance will be available to compensate the injured party for that party’s injuries regardless of who was driving. The issue is that because you have a greater risk of liability under your auto insurance policy (look for that to be going up, too), you have a greater risk of the liability being greater than the policy limits of your auto insurance and requiring a payment from the umbrella policy. This is based on general principles of auto liability, not necessarily those of your particular jurisdiction or policy. I am not your lawyer, and consult your own lawyer or insurance professional if you need details of how this applies in your particular situation. ---
**Author:** ![Antinor01](https://avatars.discourse-cdn.com/v4/letter/a/ecae2f/32.png) [@Antinor01](https://boards.straightdope.com/u/Antinor01)\ **Post date:** [September 13, 2006, 6:29pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/15 "2006-09-13T18:29:59Z")
The umbrella policy provides extra coverage above your liability limits for your other policies, teenage drivers are known to be a high risk so the chance of the policy having to pay rises. About the only way to avoid it is to have your kids removed from your policies and exclude them as drivers of your vehicles. Rules may vary in your state, but that is the general principle. ---
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [September 13, 2006, 6:49pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/16 "2006-09-13T18:49:21Z")
[QUOTE=Billdo] Under most states’ automobile liability laws, the owner of an automobile is liable for all liability of an authorized driver of that automobile (i.e. someone who didn’t steal the car). That means that if your teenagers get into an accident with your car, you will be liable as owner. The reason for this is tied into auto insurance. The owner is liable because the owner should have auto insurance, which covers all authorized drivers, so that the insurance will be available to compensate the injured party for that party’s injuries regardless of who was driving. [/QUOTE] I did not know this - will need to look into it. I know that if I am driving my car and get into an accident, an injured party can go after my insurance as well as my personal assets to cover damages exceeding my coverage. But I did not know that my personal assets (above my insurance coverage) were at risk in the event of an accident while another driver was driving my car (barring negligent entrustment, etc.) ---
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [September 14, 2006, 1:12pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/17 "2006-09-14T13:12:30Z")
[QUOTE=Billdo] Under most states’ automobile liability laws, the owner of an automobile is liable for all liability of an authorized driver of that automobile (i.e. someone who didn’t steal the car). That means that if your teenagers get into an accident with your car, you will be liable as owner. [/QUOTE] Haven’t conducted an exhaustive search, but did speak to a couple of lawyers, neither of whom had heard of such a thing. I’ll search some caselaw later today, but if you don’t mind, what is the basis for your understanding of auto liability laws? ---
**Author:** ![Rick](https://avatars.discourse-cdn.com/v4/letter/r/9f8e36/32.png) [@Rick](https://boards.straightdope.com/u/Rick)\ **Post date:** [September 14, 2006, 1:49pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/18 "2006-09-14T13:49:21Z")
Two data points for you. I was taught that insurance follows the car when I studied for my fire and casulty license many years ago. (California) One of our employees was in an accident several years back driving a company car. Other driver sued him and the company. Our company ended up supplying a lawyer to fight this in court (we won!) This was in Oregon. YMMV of course ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [September 14, 2006, 2:04pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/19 "2006-09-14T14:04:00Z")
Many states have adopted a rule like **Billdo** describes by statute because the common law rule was the opposite (or at least a lot more limited). I was unable to locate such a statute in the Illinois statutes. Some states also impose liability under the family car doctrine: > [@](#): > > A rule of law applied in particular cases of negligence that extends liability to the owner of an automobile for damage done by a family member while using the car. > **[Answers - The Most Trusted Place for Answering Life's Questions](https://www.answers.com/redirectSearch?query=family-car-doctrine)** > > Answers is the place to go to get the answers you need and to ask the questions you want I was also unable to find any Illinois cases talking about this doctrine. ---
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [September 14, 2006, 2:50pm UTC](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480/20 "2006-09-14T14:50:28Z")
[QUOTE=Rick] Two data points for you. I was taught that insurance follows the car when I studied for my fire and casulty license many years ago. (California) One of our employees was in an accident several years back driving a company car. Other driver sued him and the company. Our company ended up supplying a lawyer to fight this in court (we won!) This was in Oregon. YMMV of course [/QUOTE] Regarding the first, it is my understanding that the car owner’s **car** insurance follows the car. I don’t understand, however, why the owner’s **personal liability** insurance (or personal assets in the absence of an umbrella policy) would similarly follow the car. Regarding the second, if the employee is driving in the course of business, the principal would be liable for the negligence of their agent. If the company car was simply a perk, then I would assume the company’s liability would be based on their owning and insuring the car. [Next page](https://boards.straightdope.com/t/insurance-question-umbrella-policy/372480.md?page=2)