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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Reader’s Question:
My dad was judged to be at fault in a car accident here in San Francisco, California. Would our car insurance settle the whole amount of the damages my father needs to pay?
Guine
San Francisco, CA
If you didn’t scrimp on car insurance, you should have at least some level of financial backing from your car insurance provider in paying whatever damages and obligations (this would range from hospital and medical costs, rehabilitation expenses, economic or income loss, property damages and even payment for suffering and pain on the injured party’s end.) that needs to be paid by your father. Whether or not you will be provided the full amount depends on the coverage ceiling set by your car insurance company when you’re father signed the agreement.
There are a lot of people out there are not familiar with how their insurance would work once involved in a car accident. Some think that just because they have “insurance” that they will be covered completely. Normally, most peoples auto liability insurance coverage (which should fall greater than or equal to the minimum required coverage amount by the state of California (that is 15/30/5, $15,000 coverage for injuries per person per accident, $30,000 total limit for all injured person per accident and $5,000 for damages to property) are enough for minor car accidents and injuries. But if you’re father is obligated to pay full in a major car accident than you would want to get in touch with your insurance provider there in Sacramento. If you’re father got an umbrella policy than this should be quite enough to cover him even if it is a major car accident he caused.
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Reader’s Question:
What do car insurance providers mean when they talk about liability insurance coverage and limits? I plan to get my new vehicle here in Napa, California insured and I would like to be well informed. Thanks!
Aaron
Napa, CA
Hello Aaron! Liability Insurance is a form of car insurance protection giving you financial coverage from monetary obligations arising from injuries, economic losses, deaths and property damages that you may have caused in a car accident. This is actually one of the most important types of insurance you would want to get for your car there in Napa, California. There are three basic types of liability insurance:
1. Bodily Injury Liability – pays for treatment of injuries you may have caused to another person in an auto accident. This also covers for medical expenses, legal and even funeral expenses as well as lost wages to the other party.
2. Personal Injury Liability – Is a “No-Fault” insurance coverage that pays for treatment of your injuries. Even if you were the one to cause the accident.
3. Property Damage Liability – As stated, this pays for repair or replacement of damages you may have caused to private or public property in a car accident.
Most states that require car owners to have auto insurance coverage also have minimum levels of coverage that you need to get for liability insurance. For California, the minimum requirements for liability insurance is pegged at 15/30/5 ($15,000 compensation for each person injured per accident, $30,000 limit for all people injured per accident and $5,000 for property damages). It is highly advisable that you get as much as you can afford since car accident costs can easily far exceed the state minimum limits which you’ll have to then shoulder out of your own pocket.
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