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I've been looking into travelling to the USA (CA specifically) later this year, and hiring a car whilst I'm there.

As I understand the American legal system, if I should get into an accident and be found at fault, then I'd be liable for any and all medical expenses incurred by the other driver as a result of the accident.

The mandatory auto insurance for the state is some amount in the tens of thousands, and most rental firms offer some supplemental liability insurance going up to ~$1,000,000.

This leaves me quite concerned, because if the other driver suffers, say, a spinal injury and spends 3 months in hospital, $1m starts to look like pocket change compared to the the bills US hospitals can produce.

So what steps can you take to safeguard yourself from being liable for everything past $1m?

For reference, I'm from the UK where all car insurance is required to provide unlimited liability for 3rd party claims (c.f. the Great Heck rail crash).

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  • And won't your UK insurance cover you while you travel?
    – littleadv
    Sep 14, 2013 at 22:46
  • @littleadv Your UK driving insurance will usually only go up to the relevant legal minimum coverage when abroad.
    – je4d
    Sep 14, 2013 at 22:48
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    well, then, you'll have to drive carefully.
    – littleadv
    Sep 14, 2013 at 23:08
  • There is another factor to consider. Having a lot of insurance makes you a TARGET for lawsuits. Generally litigators try to sue up to the amount they reasonably expect to be able to extract from you. A judgement for $10M is worthless if the defendant has no way to pay it.
    – JohnFx ♦
    Sep 18, 2013 at 1:06
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    That only works in the USA. For example in Germany, suing my insurance for $10,000,000 would cost you about half a million. Even if you won half a million, that would be eaten up by cost because you would be considered to have lost 95% of the case.
    – gnasher729
    Jun 4, 2015 at 14:04

3 Answers 3

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If you are looking for high limits of liability, the product you're looking for is a personal umbrella policy.

A personal umbrella policy is good for anyone with a low risk tolerance or high risk of being targeted in a lawsuit (e.g. high-net-worth individuals). They're pretty cheap because the risk of exceeding the underlying policy's limits (your chief concern) is actually pretty low.

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    will umbrella cover the excess of the car insurance ? So if I have a car insurance of $50K/$100K and an umbrella of $250K. In an unfortunate event if I have accident and my liabilities are some how $225K, will the excess $125K come from umbrella ?
    – Raj
    Sep 5, 2019 at 13:42
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    Yes, umbrella policies are specifically designed to cover auto and personal liability (and also watercraft if you have a boat) so with your example yes, your umbrella would pay $125K. Though umbrella policies usually require minimum limits on the underlying policy and usually start at $1M, so more realistic limits would look like $250K/$500K for auto and $1M for the umbrella.
    – Aurifier
    Sep 5, 2019 at 13:54
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Just because the other side claims that much money doesn't mean they'll get that much. Your liability insurance company has a duty to defend you in any lawsuits, and will try to reach a low settlement with the other side even before it goes to trial. Your insurance company also has a duty to try to get the lowest settlement possible. If the other side sees that you don't have much money (I am not sure if U.S. courts can get your foreign money), then they are likely settle for a low amount.

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  • And they can afford expensive lawyers.
    – gnasher729
    Jun 4, 2015 at 14:05
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You are free to get any amount of coverage that you feel is necessary. Two million dollars is quite common. You may end up paying much more proportionately for higher levels, because the insurance companies will wonder why you think you need it.

Remember that the kind of multi-million dollar accident you describe is very, very rare.

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    You say this but I have not found a policy offering more than 500k/1000k
    – Vality
    Sep 3, 2019 at 20:52
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    I too don't see any insurance company offering more than 500k/$1M for personal , not sure if you are referring business
    – Raj
    Sep 5, 2019 at 13:39

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