Have a teenager? Get an umbrella insurance policy asap if you don’t want the risk your teenager bankrupting you. Yes, you love them, but they can put your finances at risk due to all the trouble they get into.
Even though my kids are young, I’m not waiting for their teenage years to get insured. In fact, I got an umbrella insurance policy many years ago before they were born. And here’s a story of one of the reasons why.
Accidents Happen Every Day
I was driving downtown to drop my wife off at the museum when a car started drifting dangerously into my lane. Instinctively, I beeped the horn to alert the driver. Then, when I drove by, the teenage kid in the back seat flicked me off!
I didn’t have a long annoying horn, nor a machine gun type rat-ta-tat-tat beep. All I did was beep once so we wouldn’t collide. The father was reading a map and driving at the same time.
I have to admit that my blood started to boil. Teenagers! I was tempted to blast him a new one when their car stopped next to me in front of the light. Instead, I buzzed down my window, stared intently, and told the kid, “Don’t embarrass your parents. I beeped at you guys because you were halfway in my lane and didn’t even know it.”
The dad was still clueless as to why I was talking to his punk kid and he also rolled down his window to ask, “What’s up?”
“You’re kid gave me the finger, that’s what’s up. You’ve got yourself a live one,” I said. The mom in the front passenger seat started questioning her son and then started screaming at him. She apologized on his behalf and said in an exasperated voice, “Teenagers!”
Teenagers Are Liabilities
In my earlier days, I may have got out of the car and lost it. Maybe we’d have a rumble in the middle of the street, I don’t know.
What I do know is that teenagers create a ton of trouble and are one big fat liability for parents. I should know, because I remember almost burning down my parents’ apartment when I tried to set my bed on fire!
If your teenager gets into a car accident and injures someone, you as parents are the ones liable for all the damages!
Umbrella Insurance Policy (AKA Excess Liability Insurance)
An umbrella insurance policy is simply an added insurance policy that kicks in after your auto and home-owner’s insurance runs out.
Some people make the mistake of getting an umbrella policy that matches their assets and no more.
But what if you have $500,000 in assets, and someone sues you for $1 million for slipping on your front steps?
It’s better to get an umbrella insurance policy with coverage of at least 50% more than your total assets.
Protect Your Financial Health With An Umbrella Insurance Policy
You spend your entire life building your assets. Thus, you owe it to yourself to protect your financial health with an umbrella policy. We’re in lawsuit happy land, so better safe than sorry, especially if you’ve got a teenager!
If you entertain a lot, have a home business with clients coming and going, or drive constantly for work, these are other reasons why you should consider an umbrella policy.
In a good way, it’s nice having very little to your name as an adult. If you’re found liable of something bad and lose in court, what are they going to go after, your underwear?
During open enrollment season, study your employee benefits carefully, and do your best to forecast your anticipated healthcare and insurance needs. Are you getting Lasik corrective eye surgery?
Max out your Flex Spending Account (FSA), which is a pre-tax expense. Anticipating visiting the doctor next year to check out a chronic knee injury? Perhaps go from a high deductible medical plan to a low deductible plan since you may need surgery.
Make sure you have long term disability in case you get injured and can’t work for months.
Furthermore, get as much supplemental life insurance as possible if you have dependents. Lack of insurance is one of the leading causes for financial ruin, so make sure you have at least the minimum coverage to protect yourself if disaster strikes!
Be well! Do you know where your teenager is?
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Updated for 2020 and beyond.