The Hernandezes Consider Additional Liability Insurance

Victor and Maria’s next-door neighbor, Jasmine Saunders, was recently sued over an automobile accident and was held liable for $437,000 in damages. Jasmine’s automobile policy limits were 100/300/50. Because of the shortfall, she had to sell her house and move into an apartment. Victor and Maria are now concerned that a similar tragedy might potentially befall them. They have a homeowner’s policy with $100,000 in comprehensive personal liability coverage, an automobile policy with 50/100/25 limits, and a small ($100,000) professional liability policy through Maria’s employer.

(a) How might Victor and Maria more fully protect themselves through their homeowner’s and automobile insurance policies?

(b) What additional benefits would they receive in buying an umbrella liability policy