Umbrella Insurance
Earlier, I discussed one way to protect yourself—umbrella insurance. It goes above and beyond the coverage in your auto insurance. On average, coverage costs $300 per year per $1 million. Depending on your situation, spending $300 to make sure you don’t have to pay hundreds of thousands of dollars can be well worth it! And if you have one or more teens in your family who drive, umbrella insurance can be an excellent idea, since you’ll be held liable if they cause an accident.
Titles
Another thing to consider is titles. As seen in the horror story at the beginning of this chapter, each car in your family should be titled to only one person’s name. If you’re a parent to a teenager, you’ll be liable, and there’s nothing you can do to change that. However, I strongly urge you to sell or give them the car when they turn 18 and ensure they’re the sole title holder.
Tenants by the Entirety
Speaking of a different title aspect, it’s important to look at how you title your assets. Some states have a joint ownership form called “tenants by the entirety.” If you’re married and can take advantage of this, I strongly urge you to. How does it protect you? If you cause an accident in a car titled only to you and get sued, the other driver can’t touch any money in an account with a “tenants by the entirety” title. This is because your spouse owns 100%, as well. That said, “tenants by the entirety” titles vary by state, and some apply to real estate and not cars. Further, if your state doesn’t offer tenants by the entirety, there may be other joint ownership
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