Auto Insurance Claims: Insurance coverage & umbrella policy, personal auto policy, one million dollars

Question
Hello -

My husband's company is changing their policy -- they've provided him with a car for years, and now they're changing to a car allowance.  

We are responsible for buying the car %26 making all payments, insurance, repairs %26 maintenance, etc.

My husband's company has just told us they will require an umbrella policy with themselves named.  Not only will this require us to get a commercial policy instead of adding on to our existing personal auto policy, costing us more, but I am really concerned about our own liability.

Can they require this, and what keeps us from being responsible for paying damages in the event of an accident?  The car and insurance policy will be in our names.

Thank you very much.

Answer
Hi Phoebe,

Yes the commercial policy will cost more. In some cases you can add an endorsement onto your personal auto policy that would provide coverage for business use of a personal auto. This will usually cost an additional 25% on top of your current premium. You should ask your auto insurer about a "business use endorsement". You should have at least 100/300/100 liability limits on the base auto policy. That combined with a 1 million dollar umbrella policy should be enough to cover any situation that may arise. If however, there is a situation that would require more than over one million dollars to resolve, your husbands company should provide cover in excess of that. With over one million in coverage you should be fine for anything that could arise.

I hope this helps
Richard Hixenbaugh