Posted On: December 5, 2012 by John McKiggan

What Does Hulk Hogan Have To Do With Car Insurance?

Hulk Hogan and the Lovely Liz

My youngest son is a big fan of wrestling. So when my wife Liz and I saw superstar wrestler Hulk Hogan (Terry Bollea) at a restaurant in Florida, I just had to ask him if I could get a photograph of him with Liz and an autograph for my son.

As you can see, Mr. Bollea was very understanding and patient with my wife and I (and all the other fans who wanted to pose with him for a picture).

What does this have to do with car insurance?

In 2007, Mr. Bollea’s son Nick was involved in a car crash that left his passenger with a serious brain injury. Nick Bollea pleaded no contest to reckless driving and served 166 days in jail.

Nick’s car was insured under his father’s policy; so the passenger sued Nick Bollea and Terry Bollea for compensation for his injuries.

Unfortunately, the limits of Bollea’s car insurance policy were not enough to pay all the damages necessary to compensate the passenger for his serious injuries.

Hulk Hogan ended up paying a significant amount of money out of his own pocket in order to adequately compensate the passenger for his injuries.

Hogan then smacked his long-time insurance broker, Wells Fargo Southeast, with a lawsuit claiming that they failed to advise him of the prudence of buying an access for an umbrella policy to protect his assets.

What’s an umbrella policy?

An umbrella insurance policy is an extra layer of insurance coverage that provides additional liability protection over and above what your home insurance and/or car insurance policies provide.

In order to understand why an umbrella policy might be necessary, consider this question: What would happen if you were in a car accident and seriously injured a passenger, pedestrian, or other driver?

If you were successfully sued for $1,000,000 in damages, and your car insurance policy only had a limit of $500,000 then it is up to you to personally pay the $500,000 short-fall out of your personal assets. This may mean having to cash-in your retirement savings, or sell your house, your car or other assets.

According to Hulk Hogan’s lawsuit against Wells Fargo, he had used the insurance broker for more than 10 years, and he alleged the broker should have advised him to purchase additional insurance coverage to protect his assets, which were worth more than $30,000,000 at the time. Hogan’s lawsuit against Wells Fargo was eventually dismissed by a judge.

Underinsured driver coverage

Another reason why Hulk Hogan’s story is important for people interested in car insurance is because of the related issue of underinsured driver coverage.

In Nova Scotia, consumers can buy an add-on to their car insurance known as an SEF44 Family Protection Endorsement.

What the SEF44 Endorsement does is provide additional insurance coverage to accident victims who are injured by drivers who have insufficient policy limits to meet their claim.

For example, assume you have an SEF44 policy with a limit of $1,000,000. You are injured by a negligent driver who only has the minimum insurance required by law. In Nova Scotia, that’s $500,000. However, in some States the minimum insurance can be as low as $10,000.

If you are inured and suffer a loss of $1,000,000, the other driver’s policy would be responsible for paying out their policy limits of $500,000. But your own SEF44 policy would pay you an additional $500,000 up to your $1,000,000 policy limit.

Back to Hulk Hogan’s case

So if the passenger in Nick Bollea’s car had an SEF44 Endorsement, there may have been enough money available from his own insurance policy to pay for his ongoing medical care. Then he would not have had to go through years of litigation in order to recover compensation for his injuries.

If Terry Bollea had purchased an umbrella policy that covered him over and above the limits of his car accident policy, he would not have had to dip into his own pocket to pay compensation to the passenger injured by his son’s driving.

What should you do?

I recommend to all my friends and clients that they make an appointment with their insurance broker. Before the meeting, make a list of all your personal assets, including the equity in your home, your retirement savings, your cottage, and anything else that you own of value.

Protect yourself if you get sued

When you meet with your broker, ask him/her what the policy limits are on your house insurance and auto insurance. If those policy limits are significantly less than the total value of your personal assets, you should have a serious discussion with your broker about whether you need an umbrella insurance policy.

Protect yourself if you get injured

You should also confirm that you have purchased the additional protection of the SEF44 Family Protection Endorsement.

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