I have assets to sue for so I got an excess liability rider for the maximum that Farmers had to offer (for up to a million dollars I think). Later I heard some story that the average cost from a major accident (or something to that effect) is over 3 million dollars. So my question is do I not have enough insurance coverage? What happens if I violate some traffic law and someone gets injured to the tune of over 1 million dollars?
Excess Liability
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mostly it depends on which state you are in, after the accident happens the ur insurance and the other party will negotiate, if the other party is not satisfied by your insurance coverage then he can sue ur assets, when the other party knows ur assets they try to get as much as they can , but uf you own a house or property it's advised to have a umbrella policy which can be as cheap as $300/year, but it's not common for such a settlement amounts unless the other party knew the limits of the insurance
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Yeah I own my home in California. That sounds about what I'm paying for my umbrella. What is the maximum amount of coverage that you can get with an umbrella policy? I am wondering if Farmers just doesn't offer a very high umbrella amount. I think my coverage goes up to 1 mil.
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Many people opt for the 1 million amount when buying a Personal Liability Umbrella policy, but some insurance companies offer up to 5 million.
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No, it doesn't really make sense. You can have 3 million in assets, buy a 3 million umbrella, and figure, "Hey, I have my assets covered," like insuring a home for $200,000 when the replacement cost is $200,000.
Your $3 million is still at risk if you have to pay any judgment above $3 million. I once had a customer giving me scenarios where no umbrella would cover the full amount of the judgment. That's the wrong way to look at it. I think auto insurance claims exceeding $300,00 in bodily injury liability represent about 2% of all auto claims. For every million dollars in umbrella coverage you take, your risk of not having enough coverage is significantly reduced. Look at the cost of a 5 million dollar umbrella policy, and if you can afford it, buy it for the peace of mind.
Edit: you mention above $3 million is the average for a major accident? That sounds very wrong and way too much to me.
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Maybe farmers has a max of 1 million for PUP policy. I do insure people in CA we can look at getting your home and pup policy for up to 5 million if you want. Its not that expensive to go from 1 million to 2 or even 3 million. Also in general Farmers insurance rates are a bit high it better to shop around using an insurance broker like myself.
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That sounds way too high for me. That's 1 in 50 injury claims.
We did have a local woman that rearended a flat bed semi haul jet engines to the local Air Force Base. The straps broke and I think 2 rolled off. I believe the claim went 8 figures (and that's just a PD claim). Of course, it exceeded her limits.
