Auto Insurance Claims: Asset protection, 1 million dollars, umbrella policy

Question
Hi Richard,

I was involved in an accident last year with a bicyclist in southern California. My insurance company has deemed me 100% at fault for the accident. The bicyclist apparently suffered from really bad injuries (broken bones and collapsed lung) and was hospitalized twice (first time for the accident, second time for infections from his injuries).

I know the other party has already hired an attorney and wants to know the limit of my policy. My insurance company keeps on telling me that the settlement may cost more than my policy limit which is $100k. I am really worried because this is my first accident ever. The car I drive is under my mom's name and so is the insurance policy. My mom has some assets (house, cars, etc), and I currently do not own any assets (I am 24 and just started working).

If my settlement ends up being more than $100k, is it possible for the other party to force my mom to pay? What should I do to protect myself and most importantly, my mom? I really don't want my accident to affect her. Do you have any other suggestions for what steps I should take?

Thanks a million for your help!!!

-J

P.S. I hope you won't get offended if I ask for a second opinion on this site.

Answer
Hi Jane,

It is possible that since your mom is the owner of the car and the insurance is in her name, that the injured persons attorney will try to go after her, especially if you are a minor. You should ask your mom if she has an umbrella liability policy. This would provide additional coverage above the auto insurance usually up to at least 1 million dollars. If she does not have an umbrella policy then she should start speaking to attornies to represent her in the event the claim exceeds her auto insurance. If you are not a minor it is more likely that they would get a judgement against you instead of your mom. Either way this could be bad and you should both consult with an attorney.

I hope this helps
Richard Hixenbaugh