Need a reason to buy an umbrella insurance policy?

Need a reason to buy an umbrella insurance policy?  Consider the following:

Pursuant to Florida law, the owner of a motor vehicle is responsible for any injuries/damages caused by the negligent operation of that vehicle – even if the vehicle owner was not himself/herself driving.  This law applies as long as the driver had permission from the owner to use the vehicle. For example, if Dad (owner) lends his car to Daughter (permissive user) and Daughter gets in a crash (her fault) causing injury/property damage, Dad is responsible for the damages even though he was not driving, nor even present when the crash occurred.  If Dad does not have sufficient liability insurance, he could have to pay out of pocket, putting his assets at risk.

The law is referred to as Florida’s Dangerous Instrumentality Doctrine.  A car – among other types of vehicles – is considered a “dangerous instrumentality”.

Many people are unaware of this law.

There are, however, limitations on the owner’s financial responsibility for the negligence of a permissive user.  The law is complicated in that regard and is set forth below:

The owner who is a natural person (ie not a company) and loans a motor vehicle to any permissive user shall be liable for the operation of the vehicle or the acts of the operator in connection therewith only up to $100,000 per person and up to $300,000 per incident for bodily injury and up to $50,000 for property damage.  If the permissive user of the motor vehicle is uninsured or has any insurance with limits less than $500,000 combined property damage and bodily injury liability, the owner shall be liable for up to an additional $500,000 in economic damages only arising out of the use of the motor vehicle.

Remember the limitation – or “cap” – only applies to the vehicle owner.  The driver would be responsible for any and all damages, including injuries, not covered by liability insurance.

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