Reader’s Question:
I’ve been told that I should get an Umbrella Policy for my car here in California. What is it and why do I need it?
Marion
Anaheim, CA
There are lost of benefits for choosing to get an Umbrella Insurance Policy. First, Umbrella Insurance is another type of additional insurance option where you can get a relatively large amount of financial coverage in case you are sued and is obligated to pay for compensation for causing a car accident. Surprisingly, you actually only have to pay a small amount in terms of monthly or regular premiums for this type of coverage but the amount of coverage you can get can reach up to a million to a couple of million dollars in total liability protection.
In the event of a claim filed against you in an accident, the only time an Umbrella Insurance Policy will take effect is once the regular liability coverage limits stated under your policy has been exhausted and is still not enough to cover for the whole monetary obligation you are required to pay for in damages or liabilities. Umbrella Policy will take care of the rest. It may be interesting to note that the state minimum liability amounts there in California is pegged at 15/30/5, that’s $15,000 total minimum for payment per injured person per accident, $30,000 total minimum limit for payment liability for all injured individuals per accident and $5,000 to cover for property damages. As you can imagine, car accident costs can amount to much larger sums hence the practicality of an Umbrella Policy.
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