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Parental liability beyond auto insurance

By Karen Aho Posted : 03/07/2014

teen car crashGary Wickert has four sons, and he deals with the aftermath of teenage driving accidents in his legal practice. He thinks every new driver's license should come with an immediate ceremony, in which the parent says:

"If you are not paying attention, you could kill yourself. Or you could kill someone else, and you will destroy my life because I will be responsible for it," says Wickert, a partner at Matthiesen, Wickert & Lehrer, a firm that handles cases in dozens of states.

The parents of Ethan Couch, the Texas teen who made national headlines in December for his "affluenza" defense following a drunken driving crash that killed four people, are not only being blamed for the boy's reckless behavior in criminal court. Fred and Tanya Couch, along with their business, have been named in at least five civil lawsuits claiming millions in damages due to negligent supervision of their son.

Given that the judge agreed with the son's defense and blamed the parents' negligence, it's difficult to imagine a civil court wouldn't do the same.

Parents worry plenty about their child's safety on the road, sometimes spelling out the rules often and loud: no texting, no parties, no speeding. But experts say parents spend far less time considering the legal and financial repercussions to themselves if their child is at fault in a car accident.

"The biggest mistake they make is they buy their kid a car and they register it in the teen's name and they allow the teen to buy insurance and they think they're off the hook," said Mike Mansel, an insurance broker and a faculty member at The National Alliance for Education and Research. "When, in fact, if that child hasn't reached the age of maturity, they still have the liability. And often they are unaware of the liability."

Teenagers are not very good drivers, through no fault of their own. They're inexperienced behind the wheel; they usually haven't been taught handling techniques, like maintaining control in a skid; and their adolescent brains aren't wired to make good choices, like saying 'no' to a joy ride with friends.

"It's the most dangerous thing we do as a civil society, driving cars and being out on the road," said Neil Burns, a personal injury lawyer in Cambridge, Mass. "And teenagers make bad decisions sometimes, even the kids that are good kids, especially when there's more than one teenager in the car."

If young people do crash -- something they do at far higher rates than any other age group -- victims can and do go after their parents in civil court, for medical costs, lost wages and other damages. In the most tragic cases, parents whose own child died while behind the wheel are sued by other victims of the crash, who are overwhelmed by medical bills or grief.

"Our job is to find other sources of recovery so our clients can recover from the harm they've suffered," said Michael Rosenzweig, a personal injury lawyer and a partner with Edgar Snyder & Associates.

If a victim is awarded a judgment in excess of the auto's insurance coverage, "you go after their bank account, their wages, their second house, there might be a 529 insurance plan," said Burns. "A lot of the time people have to go into bankruptcy to avoid these things."

There are different laws under which a parent can be held liable, and these laws vary by state. None -- or all may -- apply in any given case. In general, they are:

As the head of household: the family purpose doctrine

If an employee is careless when driving the company car and causes an accident, his employer can be held responsible. That's because the employer is considered to have control and authority over the employee's use of the vehicle.

The same principle holds true if a parent lets his child drive the family car. The child needn't be a minor, typically defined as under 18, for the family doctrine to apply. As the head of the household, the parent is considered to exercise authority over the child, much as a boss does over his employee.

The rule can even apply if the child defies orders, say, by sneaking the car out on New Year's Eve or by texting while driving.

"If they own the car, they're liable, period," said Burns.

As the parent of a minor: vicarious liability

Parents can generally be held responsible for the intentional acts -- vandalism, for example -- of their minor children. But auto accidents typically fall under negligence, and here, because common law doesn't automatically hold parents responsible, plaintiffs often assert parental negligence as well.

"If you don't have a statute that makes the parent automatically liable, then you have to prove that the parent knew or should have known" the teen could cause an accident, said Wickert.

As the irresponsible car owner or parent: negligent entrustment

Negligent entrustment falls under common law, and can always apply, no matter how old the child is. In fact, it can apply to anyone who lends their car out to another driver.

The crux is that the owner, or in this case the parent, has to be negligent himself. The key legal phrase that applies is that the parent "knew or should have known" an accident could ensue.

If a parent lets a teenager with past speeding incidents drive and the child crashes due to high speed, it's clear the parents should have known better. If parents leave both alcohol and car keys accessible, they may very well be found negligent.

Negligent entrustment can be difficult to prove in some cases, but juries are also more easily swayed in accidents involving grave injuries or death, lawyers say. Most cases are settled before trial.

"I would sue the parents in almost every instance if the kid is under 18, for negligent supervision of minor," said Burns. "The insurance company will give you a defense in a lawsuit, but they will not give you anything beyond the policy limit."

How to protect yourself

"The advice to a parent is: Assume that you can be held responsible for the carelessness of your minor teen driver, because chances are you can," said Wickert. "As a result, you have an obligation to pound into your child's head that his carelessness can do more than destroy his life, it can destroy yours as well."

In that vein, legal and insurance experts always advise this: Buy enough insurance to cover your assets. In practice, there's no reason for anyone to sue you personally if you you're not worth more than what the auto insurance will pay.

"If you have a teenage driver or a teenager in the household, then it's a good idea to have an umbrella policy, for basic liability that covers the car," said Mansel.

It's true even if the teenager has his own insurance policy, which Mansel doesn't recommend because it can cost more than adding a teen to the family policy.

"Your parental liability doesn't cease just because she or he has his own insurance," he said.

And while people can protect their primary home, vehicle, business and other assets from collection, they'll likely have to do so by declaring bankruptcy.

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