A Guide to Umbrella & Excess Coverage Policies for California Motorcycle Insurance
What is an umbrella policy or an excess liability insurance policy? Should motorcycle owners buy one? Which type of umbrella policy should you buy to protect you in case you are involved in a motorcycle accident in California?
The terms “umbrella policy” and “excess liability policy” are interchangeable: An umbrella or excess policy is an insurance policy providing liability coverage and protection over and above your underlying bodily injury liability policy.
Typically, umbrella policies will cover your house, your car, your truck, and your motorcycle, as long as you have adequate underlying policy limits on each of these things you own.
The insurance companies that sell excess coverage have varying requirements as to what minimum underlying limits are required before the umbrella policy kicks in; however, usually, the minimum underlying limits are $250,000 per person; Both bodily injury and all umbrella policies protect your assets if you have harmed someone through your own unreasonable conduct (negligence).
For example: If you are riding your motorcycle and you hit a pedestrian in the crosswalk, seriously injuring them, they could sue you and your personal assets could be at risk. If you are involved in a motorcycle crash while you have a passenger on the back, and that passenger is injured, they could sue you as well.
Since most umbrella or excess policies require that you have a minimum of $250,000 of underlying coverage, it’s important to make sure that there is no gap if you are buying an umbrella policy (if you only have $100,000 underlying policy, you’d have to come up with another $150,000 out of pocket before the umbrella kicks in).
Not all umbrella policies are alike: All umbrella or excess policies cover your liability over the limits of your underlying policy and up to your excess policy limits; however, only some umbrella or excess policies provide excess coverage for uninsured and underinsured claims.
In other words, all umbrella policies should protect your assets, but only some umbrella policies cover you if you are injured by another party.
For instance, if you are injured by a hit-and-run driver, you’ll only be covered up to the limits of your underlying policy’s Uninsured Motorist provisions; in contrast, if you have suffered more serious personal injuries, your umbrella policy only provides you with additional coverage if you have purchased one that also includes Uninsured Motorist and Underinsured Motorist Coverage.
Furthermore, if the offending driver had insurance, but not enough limits to cover your medical bills, wage loss, and pain and suffering, you must seek additional recovery from your umbrella or excess policy.
Personal injury lawyers representing clients who have suffered serious motorcycle accident injuries can work hard to maximize their client’s recovery; however, they cannot change the insurance policy purchased before their accident happened.
This means that, even though they have evidence sufficient to prove a very high value for the client’s case, they may not be able to actually collect the full value because the policy limits aren’t high enough (unless they’ve purchased high uninsured and underinsured limits along with an excess policy with uninsured/underinsured coverage).
To sum things up, California motorcycle owners should:
- Purchase as high underlying liability and uninsured/underinsured limits as they can afford since they’re more vulnerable to suffering far more serious personal injuries in the event of a motorcycle accident, and also
- Purchase an umbrella or excess policy that includes uninsured and underinsured coverage in case the motorcycle rider suffers personal injuries and the offending driver doesn’t have enough liability coverage.
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