Insurance policy limits

I have one question for those that own high line cars in the forum. Do you have property damage more than 100K? My limits are 250/500/100. The reason I am asking is that if I ever hit a ferrari and it is totaled, am I responsible over the 100K amount? I asked my insurance agent if someone hits my ferrari, and he stated that the collision amount is unlimited. So I am not worried about that. I do have a hefty umbrella policy, but I do not know if that kicks in for property damage. Anyone? Should I increase my property damage limit?

Viper

 

That's a hard question to answer, not knowing your state law.

I have never seen your scenario, though I have thought about it myself. Some companies write split limit policies country wide, but they are govered by "the law of the land". So that particular states insurance law may govern how the situation is handled.

As a general rule, your insurance company should do everything possible to protect you. That is really their duty. So when a policy limits case arises, they should obtain a release before paying the limits, unless it goes to trial, in which case an excess verdict could result in personal exposure.

I have seen a similar situation involving multiple cars and injuries instead of a single high dollar car. I think the spirit of the law is to put that limit in place for property damage to say that no more than $100K of the total limit is spent on that claim, leaving $400K for injuries which are deemed more important. That way even if the cars aren't paid for in full, peoples injuries are. Absent the need for the full $400K being needed for injuries, they would likely be able to pay more than the $100K prop. damage limit if push came to shove. Again, state law might force payment or prohibit it...

Regardless, in any situation where the your autopolicy limit is exceeded, the exposure would transfer to the Umbrella policy. That is why insurance companies set limits that you must comply with or they will not write and Umbrella policy. ie. $500K liability limits minimum. Otherwise, people would get state minimum liability limits on their auto policy and save premium costs, and companies would have more exposure via the umbrella policies, which would inturn increase costs, so they would be alot more expensive than they are.

 

Your umbrella policy is gonna kick in after your Bodily Injury Liability and Property Damage Liability run out, so don't worry about that. What I'm not too sure about is the statement about your Collision Coverage. I believe the limit for collision mirrors your PD Liability limit. Not sure though, I'll try to find out and let you know shortly.

 

Not to say that can't exist, but I've never seen it. PD is liability coverage - 3rd Party. Collision is 1st party coverage - Contractual. Premiums for Collision are based on the risk of the vehicle, which includes the value of it. One does not govern the other. Example, you can buy a $40K BMW and purchase state minimum liability limits, which includes PD when a state has split limit policies. The state limit for financial responsibility for PD is normally far below $40K. In this scenario, using the same collision deductible, the insurance premium would not be any lower for Collision if you chose a state minimum Liability policy like 20/20/10 (10K being the PD liability coverage) vs. a 250/500/100 liability policy. The overall premium would be lower though, as a result of the reduced overall liability exposure.

 

I talked to my agent at State Farm. He stated the following: If someone crashes into me or if the car is stolen, I have unlimited coverage. If I hit a Ferrari or cause a multiple car crash, it is true that my property damage is only 100K. He then stated after 100K, my umbrella policy would indeed kick in. He needed to called corporate to verify this. This puts me at ease because what if I caused an Enzo to crash? lol. I did not want to be liable for the difference between the Enzo and 100K.