4E // Real Estate & Home Builders Guide // November 2017
Son’s paltry car insurance
puts father’s assets at risk
By Ilyce Glink and Samuel J. Tamkin
Tribune Content Agency
Q
: My brother and I have owned a rental
property together for more than 15
years. There is a current mortgage, and both
of our names are on the mortgage and on
title.
My adult son, 22 years old, was involved
in an auto accident where he was at fault, and
bodily injury claims may be in the $1 million
to $2 million dollar range. Both my son’s name
and my name are on the title to the vehicle he
was driving. His mom, my ex-wife, may have
been carrying minimal liability insurance
($15,000/$30,000) on the vehicle.
She and I never talk, so I don’t know
exactly what the limits are, but she did call
me and said, “You better protect yourself.”
There is no lawsuit pending nor judgement
rendered.
What are my personal tax consequences
if I simply remove my name from my
co-owned rental property? Also, I do own a
condo ($600,000) on which I have a mort-
gage ($300,000). Any advice you can give
me would be appreciated.
: Whether you own one piece of real
estate or many, it is wise to have good
homeowner’s insurance coverage to cover
the unexpected calamities of life.
While your homeowner’s insurance can
cover you for most perils, it won’t cover
you for floods, earthquakes and some other
events unless you buy additional coverage
or obtain a different policy. Specific disaster
policies can be expensive, but in a world with
unpredictable climate variability, it may be
well worth considering.
Most homeowner’s insurance policies
include some coverage for liability issues.
Those liabilities only relate in some way
with the home. For broader issues that cover
cars, homes and other properties, insurance
companies sell umbrella insurance policies.
Because the world is increasingly
litigious, we recommend that you buy an
umbrella policy. Your homeowner’s insur-
ance policy may cover liability issues up to
$300,000, and your automobile may offer
liability coverage for $50,000. While those
sound like big numbers, in a serious accident,
it would get quickly used up. That’s why
you should consider purchasing a separate
umbrella policy that will provide $500,000
in liability coverage or more. The difference
in cost between a $500,000 and $1,000,000
umbrella policy is usually not that great.
If you have automobile liability coverage
that is insufficient for an accident -- such
as the one your son was involved in, which
seems to have had tragic consequences -- the
umbrella policy coverage would kick in. The
idea behind umbrella insurance coverage
is to give you a bit of peace of mind over
accidents that happen involving your many
properties and vehicles.
From what you wrote in your email, we
have to assume that your son doesn’t have his
own automobile insurance and that the auto
policy coverage included minimal liability
insurance. As the owner of that car, you
should know what insurance coverage you
have.
If your son bought the insurance policy
and obtained the least amount of insurance
possible, and yet you owned the car, well,
that’s on you. You should have known
better than let your son drive with such
little coverage, leaving you (and your assets)
exposed.
You, as the owner of the car, may have
some responsibility for the actions of the
driver. To what extent is unknown to us.
You’ll have to talk to an attorney about your
possible exposure.
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725 S. Main Street,
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Valerie Alderson
Principal Broker
509-520-3331
licensed in OR & WA
Principal Broker/ Owner
541-969-9964
licensed in OR & WA
A
Maria Soto
Broker
(541) 938-3331
509-200-8291.
licensed in WA.
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Discover why
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Principal Broker, GRI
541-276-1957
skoqm4@gmail.com
(541) 276-1957
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1803 Emigrant Ave.,
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FAX (541) 276-2714
With your new home comes new responsibilities – like protecting your
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Dan Ceniga, Agent
1704 SW Frazer Ave
Pendleton, OR 97801
Bus: 541-276-3182
dan.ceniga.b739@statefarm.com
Stan Henderer, Agent
33 SE Dorion Avenue
Pendleton, OR 97801
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stan.henderer.lo18@statefarm.com
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