What is an umbrella auto insurance policy?

I'm 19 and still live at home. Are my parents still, in any way, liable for my actions? How would this determine whether or not I should get an umbrella? Are umbrellas cheaper? I really don't know much about them--I just want to figure out if it'll be cheaper and still provide the coverage I need.

Your parents are not liable for you anymore since you are over 18.

However if you are have a car and it is insured or is in their name, both you and your parents can be liable for your accidental negligence.

An umbrella policy is an insurance policy that covers any holes where you are NOT already covered, and can help protect you from damages and lawsuits for accidental negligence.

It it not limited to auto. It covers "EVERYTHING" hence the name, "umbrella."

One cannot just at an umbrella policy and cancel other insurance. All other insurance policies kick in FIRST. Umbrella kicks in after. Umbrella covers all EXCESS liability beyond other insurance to the amount of the Umbrella Policy.

I would definitely get an umbrella policy, have one, they are very cheap. They will increase you car insurance a little because most umbrella policies will require a higher coverage. Most umbrella policies start at $1 Million.

Check with your auto insurance company, or other insurance company get several quotes.

How does it protect you?

Let's say you get in a car accident, accidentally hit someone and they were severely injured; you are liable for damages. If the damages exceed the auto insurance coverage, the remainder bill is on you.

Example:
Damage Claim (or law suit) - $500,000
Your auto coverage $100,000
Your potential liability: $400,000

With a $1 MM umbrella policy, you can be sued up to $1MM plus any basic insurance. If you are sued for negligence, your insurance company will defend you in the law suit (double check - ask). WHY? They don't want to pay out a $1MM claim.

If the insurance company gets the other party to settle or a judge rules that damages are $200,000, not $1MM as the claimant is asking for, then the insurance company just saved $800k ($1MM risk - $200K loss = $800K savings).

Let's say you have a party or just anyone comes over and someone slips and falls and injures themself. They sue for medical bills and negligence. If you don't own the property, or are just renting, the renter or owner should have coverage.

If you own a home or have equity, have little or no debt, make $50K or more a year you want to have umbrella policy.

One lawsuit can wipe away assets. Even if it wasn't your fault, the insurance company sends in their legal dogs to defend you so they can try not to pay or pay less than the policy.

The legal costs to defend a (federal) law suit (amounts over $7,500 in CA) can easily run $10,000 - $40,000+ depending on the amount of time and basis for the suit. If someone was seriously injured, required high medical bills, hospitalization, legal fees could exceed $50-100K or more.

Since you are young, you have a lot of time for "EARNINGS POTENTIAL." If you were to fall in a bad legal situation, didn't have the money, the only way out of it might be bankruptcy (would try to avoid) or someone can garnish wages or future earnings.

If you can afford the costs, which may be $300/ year or so depending on the insurance company, I would do it for peace of mind. Of course if there was an incident, you can't run out and get a policy after the fact. It won't cover events that have already occurred.

Good Luck!

An umbrella policy is one that covers autos and home against a large liability claim. Such as someone being hurt and you are liable, the umbrella would cover liability claims over the separate home or auto policy.

It is not likely that your parents could be held liable for your actions unless they are still claiming you as a dependent. You can never be 100% certain what the outcome of a law suite might be.

Umbrella insurance is an extension of the liability insurance. This is something that would be an added cost to your minimum insurance required by law. I would NOT recommend that you get an umbrella policy at this time. If your parents own their home, or have other valuable assets, they should have an umbrella policy.

The purpose of an umbrella policy is to give you extra protection. Let's say that you are at fault in a car accident. You have $100,000 in liability protection in your regular auto insurance. If the victim has $250,000 in medical bills, they can take you to court for the $150,000 that you still owe after your insurance runs out. If you don't have the money, they can take seize assets like your house, car, or boat. This is where an umbrella policy comes in. Anyone who has valuable assets could benefit by adding an umbrella rider to existing insurance or buying a separate umbrella policy.

Yes, they could be held liable. I had a real live claim where the parents' umbrella paid out, over an auto loss, for the 26 year old son, who had his OWN auto policy.

An umbrella doesn't mean what you think it means. Yes, they are much cheaper than, say, auto insurance, because THEY DON'T COVER THE FIRST $250,000 OF LOSS. There is no "umbrella auto". There is umbrella, it goes OVER an exisiting auto, it's not INSTEAD of auto coverage, see above regarding the required underlying limit.

An umbrella is a policy that comes after purchasing the others. Wealthy people carry umbrellas to increase their coverage. It adds 1 or 2 million to their basic auto insurance. You do not need an umbrella

covers all perils --collision -comprehensive --townig --rentals cars etc

lets say you drug a chick and rape her at your parents place, she could sue the owners, your parents for damages. Most home owner policies carry up to 300,000 in liability coverage. If your parents have net assets over 300,000 they should get an umbrella policy which are not very expensive-- you can get a million dollars for about $15 bucks. Now, lets day you are driving your own car and kill someone the estate wont be able to go after your parents assets, since they are not the owners fo the car. Bottom line: behave!

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