What happens if your teenager causes a car accident? And what happens when a child is injured in one?

In this episode of Off The Record, attorneys Paul Adam and Colin Gerstner break down the legal and insurance issues every parent should understand when it comes to teen drivers and injury claims involving minors.

The discussion covers why teenage drivers must be added to your insurance policy, how household exclusions work, and situations where parents may face liability for allowing a child to drive. The attorneys also explain how injury settlements work when a child is involved, including court approval requirements, conservatorships, structured settlements, and why the legal system places additional safeguards around compensation for minors.

In This Episode:

🚗 Why teen drivers must be added to your insurance policy
📋 What household exclusions mean for parents
⚖️ When parents may be liable for a teen driver’s actions
💥 How insurance coverage works after a crash involving a minor
👨‍👩‍👧 Why child injury claims are handled differently than adult claims
📄 Court approval requirements for minor settlements
💰 Conservatorships and managing settlement funds for children
📈 Structured settlements and long-term financial planning for injured minors
⚠️ Important deadlines and legal considerations for child injury cases
🛡️ How Montana law protects compensation awarded to injured children

Whether you’re preparing for your teen’s first time behind the wheel or want to understand how child injury claims are handled, this episode offers valuable insight into protecting your family and navigating the legal process.

📞 Have questions about an injury claim involving a child? Contact Gerstner Adam Law to learn more about your options.

Paul Adam 0:08 Welcome back to another episode of Off The Record, the Gerstner Adam Law Podcast. My name is Paul Adam. This is Colin Gerstner. You know, let’s start off with, you know, a scenario that you’re going to run into really quick. You know, you have a son that is about to turn, he’s about to turn 14, he’ll get his permit next year. What is your recommendation? What are you going to do, and what’s your recommendation on how to insure a brand new driver?

Colin Gerstner 0:35 Sure, so you need to call your insurance agent, or however you get your own insurance, you got to add them on as a driver on your own policy. One thing you run into sometimes is people say, you know, do I have to do that? You know, it’s gonna cause my premiums to spike because they got, you know, a teenager on and the right, your premium is gonna rise and it’s gonna suck, but you got to do it. The issue is that there’s not gonna be coverage should your son cause a crash. We did talk about on a prior episode about permissive drivers, and so if you let a buddy borrow your car and they get into a crash, your own liability coverage would cover that. It’s different if it’s a household driver, it’s commonly called a household exclusion, so that instance, you’ve got somebody in your household that’s a driver that’s not covered under the policy, they’re not insured, they’re not, they don’t meet the definition of an insured, and so you’re really exposing your child, you know, to a large judgment or awful things if you don’t add them onto your policy.

Paul Adam 1:40 Yeah, so it is, it is. It is an affirmative step. You do have to go through the process, add their name, and yeah, it is expensive to ensure you know, especially 14- 15-year-old boys.

Colin Gerstner 1:58 Another question I get from parents, mostly friends, who are wondering, like, let’s say my knucklehead son causes a crash. What’s my exposure? Like, what am I at risk? You know, maybe the business owners worry about their business assets, and the short answer is that no, simply by virtue of the crash, and so there’s this concept called vicarious liability, and that’s where you’re on the hook if somebody buys something else’s negligence. Most commonly see that, like with employers, right? If an employee, you know, wrecks their work truck into somebody, then that business, the employer, is on the hook for the damages. That is not, that’s not the case automatically for parents.

Paul Adam 2:43 Right.

Colin Gerstner 2:44 The exception would be if there’s what we call it a negligent entrustment claim, and in short, that means if you have reason to know that the public’s at risk simply by your kid driving, you could be on the hook if you let your kid drive anyway and they cause a crash. Let’s say you know he has a substance, you know, abuse issue. He drinks too much, or he’s already got racked up several speeding tickets already, things like that. Then you could have a separate negligent entrustment claim against you.

Paul Adam 3:13 I’ll tell you one kid that you won’t have to worry about negligent entrustment. Rory wasn’t.

Colin Gerstner 3:18 Oh, man. What a kid.

Paul Adam 3:19 I think he should get free insurance. I don’t think there’s any risk, yeah, of that kid causing a wreck, man.

Colin Gerstner 3:26 Probably even a discount on his parents’ policy.

Paul Adam 3:28 Yeah

Colin Gerstner 3:28 Add him on.

Paul Adam 3:29 It’s like you bundle in Rory Whisenhunt and your premiums go down. Yeah, no, I agree. I want him on my policy. Yeah, I never thought of that.

Colin Gerstner 3:39 There you go.

Paul Adam 3:41 So, let’s, let’s flip this around a little bit. So, we talked about insuring miners. Now, tell me a little bit about, you know, when minors get hurt, because this happens, you know, we see it a lot, where, you know, you’ve got a family that’s driving and they get hit, and they’re in an auto accident, you’ve got kids in the car, you got parents in the car, and everybody has some injuries, you know. What’s the difference between, you know, a parent’s injuries versus a kid’s injuries, and those, the remedy for that.

Colin Gerstner 4:12 Sure, so the remedies are the same. They’re entitled to all the same damages we’ve spoken about, medical bills, you know, pain and suffering, stuff like that. Legally, the mechanism is different, and so you’re certain claim on behalf of a child, but you know they’re minors, not 18, and so if you file a lawsuit, you need somebody to be the party. So, typically, it’s a parent, yeah. And so, my case, the plaintiff would be Colin Gerstner, comma as parent and guardian of the minor, that’s hurt.

Paul Adam 4:47 Yep

Colin Gerstner 4:48 Another issue that comes up with minor injuries is settlement, like who has authority to settle a case?

Paul Adam 4:56 You know, throughout this episode, I’ve been a little distracted, I’ll be honest, and it’s the bright red burning sunburn on your forehead, Colin.

Colin Gerstner 5:06 Oh man, so normally I’m a hat guy, I wear baseball caps outside, I have no hair up there, I gotta protect myself. But I recently went to my very first Renaissance fair with my daughter, who’s in all things medieval and princesses, and at her request I went dressed as a Scottish king, and turns out baseball caps don’t go with a kilt and a tunic, and so I for went the hat, spent all day outside, despite my best efforts, ended up with a sunburnt scalp. Paul Adam 5:37 But you know what else is burning?

Colin Gerstner 5:39 What is it?

Paul Adam 5:40 The hot deals, the giveaways that we always do on the episodes. So, if you’ve listened this far, make sure to take note of the code that’s at the bottom of the screen. Go to the website, click on the tab, and then enter that code for a free giveaway. We’re always changing up what we give away. You don’t know what it’s going to be, but I can guarantee it’s something good.

Colin Gerstner 6:02 And it’s probably me signed by Paul.

Paul Adam 6:04 People may not realize, too, is the time limitations on filing claims, or rather not filing claims, but rather filing lawsuits when a minor is injured, and so typically when you would have, you know, three years for a negligence lawsuit, you know, to file that lawsuit. That clock doesn’t start ticking until that kid reaches the age of 18, and then you have three years from that point, and so you know you may have a kid with a really bad injury at age 10. The benefit, I guess, is being able to see that recovery drawn out over a much longer period of time, and then you can make a decision whether or not to file a lawsuit, you know, after that kid becomes an adult.

Colin Gerstner 6:56 Sure, yeah. And to be clear, for the viewers and listeners, that doesn’t preclude you from settling a claim or filing a lawsuit before the kid’s 18, right, but it could be another tool, another option where you wait, or maybe the kid waits until they’re 18, and they can pursue the claim by himself.

Paul Adam 7:15 So once you do get to settlement, though, that does, that creates a few other issues that you, you wouldn’t typically have in a normal case. So, in Montana, when you settle a minor’s claims, you’ve got different threshold for amounts that you can settle at and different requirements, I guess, with those settlements. So, Colin, I guess, talk us through, you know, an example of a very minor injury, minimal damages. You just want to move on with life. Couple $1,000 any problem with that?

Colin Gerstner 7:52 Yeah, so I mean, obviously things to be aware of, but it’s less complicated, so you know, under the law, and most people know that if you’re under 18, you can’t sign contracts, you know, can’t really expect to manage your own financial affairs, things like that. So, the laws imposed a requirement that the funds be managed for the minor’s benefit by an adult. Now, the thresholds for court approval, I guess I’ll start there. So, if you resolve a case for under $5,000 to what it currently is at, you don’t need court approval, and so in that case, let’s say the kid is minimally damaged, luckily yet under $5,000 you settle, the parent can sign the settlement agreement and receive the funds without court approval. Now, the law still needs to be followed. The adult still needs to manage for the kids exclusive education and benefit and support, but just skips the step of going to the court to get approval.

Paul Adam 8:53 Yeah, and so you know a lot of times we do see damages that exceed $5,000, and there’s, I think, there are a couple of ways to do it. After that, you know, on the more formal end, you’re going to be, you know, petitioning the court for a conservatorship and establishing a conservator to formally manage that money and make accountings to the court on an annual basis but there’s also, there’s also other ways to do it, right?

Colin Gerstner 9:27 Sure, yeah, and so if you settle for over $5,000 which is, you know, the overwhelming majority case that we’ve handled for minors, you have to get court approval, and so you reach a settlement before the parent, or whoever it is, can sign that the settlement agreement, and actually receive the funds. You got to file with the court, because the court is protecting the minor. They don’t want this to be sold short. They want to oversee it to some degree. And so you file your petition, present the facts to the court, present the summon amount, and the court has to give authority to settle for whatever deal you reached.

Paul Adam 10:05 Yeah, I mean, in, in, in some, some of this is getting pretty dry, folks. So, if you’re sticking with us, we really appreciate you. There’s just, there’s a less formal way of doing it, if the court allows it, which is court approval that may not require you to file annual accountings that just says yes, we approve this amount for this minor, we’re not going to make you jump through a bunch of hoops, but just make sure you’re using that for the benefit of the kid.

Colin Gerstner 10:34 You know that you’re always concerned about, you know, child, you know, being injured and receiving money that to compensate them for the harm than a parent swindling it right and most parents wouldn’t dream of that but unfortunately some might and so typically it’s apparent but there are situations where it might not be apparent so I’ve served as a conservator before for minors it could be some family dynamics there was need a neutral third party to oversee the funds, make sure they’re used appropriately. Sometimes there’s an odd conflict of interest, and that can be like where a parent causes the harm, right? It’s driving recklessly good parent, but you know it could be on the other side of the case, the defendant, right, and obviously they can’t be the one approving settlements that involve them.

Paul Adam 11:24 Yeah, if they caused the, they caused the injury, right. So, no, there’s a lot there, you know. Occasionally, we’ll see parents make decisions to also structure those amounts.I found these to be just great results, great outcomes for kids, where you know there’s certain payouts over time, but it lets these kids grow up, and it gives them, you know, some money as they come into adulthood, and you know, are accruing expenses, whether that’s college or a house or a car, or you know, just starting a family, and so we’ve seen that stuff play out, and those are the feel-good stories, and so you know, I guess for our listeners, if you have questions on that, there’s just a lot of ways to manage those settlement proceeds, or whether that’s a judgment or a verdict coming in, and we’ve seen it all.

Colin Gerstner 12:25 Correct. Yep, reach out if you got any questions. Always happy to, you know, talk with prospective clients, and hope you hopefully guide you through it. It can be complex, writing, be scary. There’s additional steps again, all good, all to protect the miners, but you know, rules and laws, you got to comply with.

Paul Adam 12:42 And it’s, it’s, it’s more emotional when it involves your kids, it just flat out is, you know, it’s one thing, or if you, you, or I get hurt, Colin, but if our kids get hurt, that adds a whole nother layer of emotion and complexity to it, which can really cloud things, and so, yeah, that’s that’s something to keep in mind. So we appreciate you listening until next time.