Does Umbrella Insurance require max coverage on car insurance?

[Josephine Breign]

Hi BP! This question is for landlords who chose Umbrella Insurance instead of putting their properties in LLCs. Seems like the UI only comes into play after all other insurance limits are reached. We're having trouble getting cheaper car insurance because the UI we have for our property (which is under our name) requires the max limits for our car insurance. Hope I'm explaining this correctly. Is this the norm? 

[John Mocker]

Josephine,

An umbrella policy, Personal or Commercial, will have requirements for the coverage on the underlying policies.  The reason for this is to keep the umbrella for the the larger losses.  That makes the Umbrella policies have less claims so the cost can be cheaper.  

On a personal auto policy there are two ways the Liability can be written:

1. separate limit for Bodily Injury and for Property Damage

2. one limit for the combined Bodily Injury and property damage

The lowest required limit for your auto policy is likely to be, for a personal umbrella is $100,000 per person/$300,000 per accident for Bodily Injury and $100,000 for property damage.  For Combined Single limit policies the lowest is likely to be $300,000.  Many Umbrellas will require higher limits than those I mentioned.  If your company requires more than the $100,000/$300,000/$100,000 or $300,000 combined, you could shop around and see if there is a less expensive alternative for all of your coverage.  There are some stand alone umbrella policies out there that would not require you to move any of the other policies but they tend to be more expensive.