Carpools that get kids to school and practice are a lifeline for busy parents juggling work and other obligations. They get kids where they need to be and save participating parents time, fuel, and parking costs. However, parents rarely think about the potential insurance implications of chauffeuring groups of children in their personal vehicles. That’s a major oversight, because car accidents involving carpools can create complex legal issues.
A Harvard University study found that 62% of all personal bankruptcies in the United States are due to medical expenses. Children injured in car accidents can face permanent disability and a lifetime of related expenses. Catastrophic medical costs for severely injured children may lead to lawsuits as parents attempt to meet the costs of care for their child.
How well are you covered? Check your auto policy’s Bodily Injury liability coverage.
How Bodily Injury (BI) liability coverage works. This coverage protects you financially by paying toward damages if you are found liable for accidentally causing injuries or fatalities to others. The coverage pays toward medical costs (such as ambulance transport, medical treatments, hospital stay, therapy, medical equipment, doctor’s fees, etc.) or funeral costs.
Why BI coverage matters to you as a carpool participant. If you are found to be at fault in an accident, the settlement or judgment against you could be for both injuries inflicted to people in other vehicles or pedestrians as well as children in your care who are riding in your vehicle. In a serious accident, those costs could be hundreds of thousands of dollars — or more — for just one person.
Without sufficient coverage to meet the amount of the claim, settlement, or judgment against you, the courts can order the monies to be taken from your wages, savings, investments, and other property.
How much coverage should you have?
When you purchased your policy, you had the option of selecting an amount of BI coverage. (Check your policy’s Declarations Page to find your coverage amount.) If you decided to select your state’s minimum required coverage amount, you could have as little as $15,000 of coverage. Medical costs for one injured child alone could exceed that level of coverage many times over. Instead, consider a coverage amount of at least $250,000/$500,000. That means that your policy would pay up to $250,000 for one person’s injuries in any one accident and up to $500,000 total for all injuries in any one accident.
Consider Excess Liability Insurance. If you are or will be a regular carpool driver, consider purchasing an excess liability (umbrella) policy. This type of coverage applies when the amount of the settlement or judgment against you exceeds your auto policy’s liability limits and will pay in excess of the limits of the coverage you select. It’s generally inexpensive when compared with the possible financial consequences of being found at fault in a serious accident.
Check your Underinsured Motorists coverage
So what happens if you are in an accident in which you are not at fault, but you and your passengers are injured? Or if your child is in a carpool and injured when another person is driving?
Don’t assume that other drivers will have enough insurance to cover medical treatment. In fact, 13% of all drivers on the road don’t have any insurance at all. Uninsured/Underinsured Motorists (UM/UIM) coverage pays toward these medical costs if you are injured by a driver who either has insufficient coverage to pay your medical costs or no insurance at all.
Protect yourself from irresponsible motorists. Review the Declarations Page of your auto policy to see how much UM/UIM coverage you have. While UM/UIM coverage is mandatory in some states and optional in others; we suggest you get it even if it’s not required. A good rule of thumb is to match the coverage amount of your BI coverage.
Car accident liability costs can be catastrophic, and accidents involving children can have possible devastating financial and legal consequences. If you participate in a carpool, protect yourself, your family and your passengers with a sound insurance strategy.
Our Risk Coaches™ are licensed insurance professionals who are trained to look at coverage from your perspective. They’re glad to help you navigate the often-perplexing world of insurance coverage. Contact your local Risk Coach professional or call us at 800.342.5342, Monday through Friday from 8:00 a.m. to 8:00 p.m. ET.