Hulk Hogan Learns a Lesson on Insurance that We All Can Learn: Everyone Can Use an Umbrella Insurance Policy April 28, 2010

The wrestler Hulk Hogan is suing Wells Fargo Financial services for failing to advise him about the insurance he should have purchased.  At first, this lawsuit may sound crazy: suing because a company failed to recommend that you buy more of their product, but it has very serious implications.

This legal action grew out of a tragic accident when the wrestler’s son had a car accident that left his passenger and friend, John Graziano, with brain damage and permanent injuries. The Graziano family sued on behalf of their son arguing that Hulk Hogan, whose real name is Terry Bollea, should have known that his son liked to drag race and the wrestler could have prevented the accident. The families settled the matter out of court. 

Hulk Hogan purchased a number of insurance policies through Wells Fargo including automobile insurance that had a limit of $250,000 per person per accident. Given the facts of the case that included alleged drag racing and alcohol and the extent of Mr. Graziano’s injuries, it was likely that any award would greatly exceed $250,000 and Hulk Hogan would have to pay the amount not covered by his insurance. 

Mr. Hogan’s suit alleges that Wells Fargo failed to advise him about the availability of an “umbrella policy.” Florida law requires that insurers notify their clients about umbrella policies and New York law has a similar provision.  Umbrella insurance sits on top of your existing automobile or homeowner’s insurance and provides additional coverage. Most umbrella policies start at $1 million, but many total $3 million or more.  The greater your assets, the more coverage you should have. Given the extent of the protection, umbrella insurance policies are relatively inexpensive. Hulk Hogan’s lawsuit alleges that the lack of an umbrella policy cost him $10 million in damages.

This case offers an important lesson for insurers: make sure that you offer your insured all the coverage they might deserve and need. Hulk Hogan’s case offers lessons for the rest of us too. We can all benefit from having umbrella coverage.  This insurance is not only for the rich. It is relatively inexpensive and offers peace of mind in case of a tragedy.

How does this insurance work? Let’s say that you are involved in a car accident and the other driver suffers a terrible injury such as a severed spine. The driver sues you for damages and a Court awards the injured driver $2.25 million. If your insurance had a maximum coverage of $250,000, then you could be liable for the remaining $2 million. The other driver could file a judgment and seek to collect the balance from you by wiping out your bank accounts and other assets (New York law protects your primary residence). If you had a $3 million umbrella policy, then your umbrella policy would pay the remaining $2 million.

This material is intended for informational uses only. It is not meant as legal advice. To receive legal advice, you should consult an attorney.

I hope you found this information helpful. Please call or email me if you have comments, questions or would like assistance with an auto accident case. You can also visit my website.

Carol L. Schlitt
New York Personal Injury Attorney
http://www.schlittlaw.com/
1-800-660-1466
Carol@SchlittLaw.com