
Am I Still Insured if My Driving License Has Expired?
Quick Answer
Your car insurance isn’t automatically canceled if your driver’s license expires, but your insurance company may not cover losses that occur when your license isn’t valid. Citations for driving with an expired license could also hike your premiums.

Standard insurance policies like your home and auto plans provide liability coverage that helps protect you if you're responsible for injuries or property damage, but it may not be enough. Umbrella insurance helps protect your assets when claims and judgments exceed your regular policy limits. It also provides protection in certain situations your standard insurance policies don't cover. Read on to learn when umbrella insurance is worth considering, how much you might need, what it costs and how to get it.
What Net Worth Do I Need for Umbrella Insurance?
Since it provides excess liability coverage, umbrella insurance is worth considering when your net worth exceeds the liability limits of your home, auto or watercraft policies. But before you can buy a policy, you need to meet the requirements of your insurance company.
Insurers generally require you to have a liability limit of at least $300,000 on your homeowners insurance and $250,000 on your auto insurance before you can purchase an umbrella policy.
Having adequate coverage can help protect your existing assets against claims, judgments and lawsuits. However, your current net worth isn't the only factor to consider when deciding whether umbrella insurance is a good choice. It's also about your liability risk and earning potential.
Even if you don't have a sizable investment account balance yet, umbrella insurance can help protect your future income from wage garnishment.
Example: The liability limit on your auto insurance policy is $500,000. You're at fault in a car accident that results in serious injuries, and the driver of the car you hit sues you. She spends two weeks in the hospital, requires extensive rehab and will be out of work for six months.
Costs related to the accident include:
- Hospital bills: $200,000
- Rehab: $30,000
- Lost wages: $60,000
- Pain and suffering: $1 million
That's a total of $1.29 million. In this scenario, your auto insurance would pay the first $500,000, and an umbrella insurance policy would cover the remaining $790,000. Without it, you'd be on the hook for expenses above $500,000.
Learn more: What Is Umbrella Insurance?
How Much Umbrella Insurance Do I Need?
The amount of umbrella insurance that's best depends on multiple factors. Consider the following to select an amount that's right for you.
Current Insurance Policy Limits
Umbrella insurance is meant to supplement the liability limits of your standard insurance policies. If those limits don't provide adequate protection, umbrella insurance can kick in to help preserve your existing assets and future income.
Tip: Some umbrella policies have a retained limit, which acts like a deductible, and is the amount you must pay out of pocket before coverage kicks in. It may only apply to small claims.
Risk Exposure
Determining your risk of a liability claim, lawsuit or judgment can be tough to gauge. However, it may be greater than you think, and if you have a high risk profile, it's worth considering higher policy limits.
If you have teen drivers living under your roof, a pool or trampoline in your backyard or own rental property, your risk is increased. People who may be the target of a slander or libel lawsuit are also at higher risk.
Net Worth
Umbrella insurance helps protect your assets from seizure. Calculating your current net worth can help you determine how much you need to buy to protect your property, savings and investments. When doing the math, keep in mind that money held in accounts governed by ERISA, such as employer-sponsored 401(k) plans, are usually protected from lawsuits, although there are exceptions.
Learn more: How Do You Calculate Net Worth?
Future Income
Having adequate umbrella insurance isn't just about protecting assets you've already accumulated; it's also about protecting your future earning potential. If you don't have enough insurance and assets on hand to pay a judgment outright, your wages may be garnished to cover the amount you owe. Consider how much you stand to lose when choosing your coverage level.
Tip: If you're unsure how much umbrella insurance to buy, consult a financial professional to help you make the best decision based on your complete financial picture.Learn more: Should I Have Umbrella Insurance?
How Much Does Umbrella Insurance Cost?
Compared to other types of coverage, umbrella insurance is relatively inexpensive. It's sold in increments of $1 million, with rates around $150 to $300 per year for $1 million worth of coverage and $500 to $1,000 for $5 million. The amount you'll pay for a policy varies based on several factors, including:
- Amount of coverage: The higher your policy limit, the more it will cost.
- Claims history: Policyholders who file insurance claims cost providers more than those who don't. If you have a history of claims on your record, your premium will probably be higher.
- Risk: People with a higher risk of filing a claim typically have higher rates. If you have teenage drivers living with you, own rental property or have other high-risk factors, you'll likely pay more for a policy.
- Insurance company: Rates vary by provider.
- Credit history: In most states, companies can use your credit-based insurance score to help determine risk and set rates.
How to Get Umbrella Insurance
Depending on the insurer, you may need to buy an umbrella policy from the same company that provides your homeowners or auto insurance. If your insurer offers multipolicy discounts, adding another policy to your existing coverage may help you save.
If your provider doesn't offer umbrella insurance or you'd prefer to purchase coverage from a different insurer, you might be able to get a policy from another company. However, you'll still need to meet liability requirements for your home and auto insurance policies.
If you have questions, an independent agent can help you weigh your options. Once you decide how much coverage you want to buy, all you need to do is select a policy and make a payment.
The Bottom Line
If your net worth exceeds the liability limits of your regular insurance policies or you have a high risk profile, buying umbrella insurance may be a smart move to help protect your current assets and future earning potential. Before adding another policy, review your existing coverage to ensure it still provides adequate protection at affordable rates.
If you haven't shopped for insurance recently, it may be worth comparing quotes from multiple insurers for all of your current coverage to ensure you're not paying more than you need. With quotes from dozens of providers, Experian's auto insurance comparison tool can help.
Don’t overpay for auto insurance
If you’re looking for ways to cut back on monthly costs, it could be a good idea to see if you can save on your auto insurance.
Find savingsAbout the author
Karen Axelton specializes in writing about business and entrepreneurship. She has created content for companies including American Express, Bank of America, MetLife, Amazon, Cox Media, Intel, Intuit, Microsoft and Xerox.
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