We hope that you had a terrific Labor Day Weekend. Unfortunately, there were several fatal accidents on our NH highways over the holiday weekend. One of the tragic events happened near Concord, NH. It’s reported that a young teen “stole” a 2012 car from his father. This will likely need to be examined in the courtroom. If the father allowed his son to use the car on other occasions … It could be argued that the son thought he had permission to use the vehicle. This young teen was also involved in a police chase and another young passenger in that automobile was killed. What would happen if this scenario happened to you? We are not lawyers, so the legal aspect we will not be examining but the auto insurance has some steadfast NH DMV regulations we would like to discuss.
It is true that in the state of NH you are not required to file proof of auto insurance to own and operate an automobile. That can be a little misleading for you need to be able to pay for your liabilities of that accident within 90 days. If you cannot pay these funds, the state of NH will come after you in the form of removing your right to drive until the debt is settled. They can also require that you carry an “SR22”, which proves that you carry auto insurance. The cost of a “SR22” can vary but usually it is several hundred dollars to put in place. Annually thereafter you have to pay a fee to continue to carry it. The DMV will decide how long you will be required to carry the “SR22”, but it will be at least until your accident related debt is paid.
In this scenario, the young teen is in jail for vehicular homicide with a bail set at $200,000. These are very serious charges and obtaining legal representation will be costly. If you are carrying auto insurance and your teenager is living at home, your auto insurance will probably cover him/her up to the limits stated on your auto policy. He/She should be listed as a member of your household and also a driver of the vehicles, which are insured. With that said, legal fees and your liability limits are available to you. Auto insurance will also post bail for your teen. There could be a limitation on amount of the bail. If it is deemed that your teen was involved in an illegal act like car theft at the time of the accident … all coverages could be in jeopardy.
If the amounts awarded to the accident victims are greater than the amounts that your auto liability insurance will pay, you could be sued for the difference. This could mean hundreds of thousands of dollars you would owe to the victims. Your assets including future income could be taken to settle the debt. An insurance policy called an umbrella could help you deal with this huge debt. This is a liability policy that covers you over the limits of your underlying auto policy. If the limits of liability on your auto policy were $250,000 per person with a total of $500,000 maximum to be paid out for bodily injury for this accident and if the victims were awarded more than that amount, the umbrella policy would pay the balance up to its maximum benefit minus your deductible. Most umbrellas can be for a $1 million dollars up to several million dollars depending on your financial need. These policies can be relatively inexpensive –a couple of hundred dollars per million dollars of coverage. Purchasing an umbrella policy is a small price to pay especially if you are required to pay several hundred thousand dollars to millions of dollars to pay off a liability debt.
Another important feature of your auto policy is that the legal fees do not reduce the amount of the liability coverage available to pay the claimant if necessary. Legal fees are usually paid separately. Not having an auto policy would make you liable for the legal fees costs personally. Thus not having your automobiles covered by insurance could be very costly to you for sure. We at Brownell Insurance would be happy to help you understand your auto policy better and further explain the coverages available to you by purchasing an umbrella policy. Hopefully, you will never have to find yourself in this scenario but we are sure you can imagine how easily it could happen. Auto insurance can help in your time of need.