Why Umbrella Insurance Is Important & Who Needs It
You Don’t Have To Be A Millionaire To Be Sued Like One.
What is an Umbrella Insurance Policy?
An Umbrella Insurance Policy is coverage that goes beyond the liability coverage limits of an insured's homeowners, auto or specialty insurance. It provides an extra layer of protection for those who are possibly at risk of being sued and suffering loss of valuable assets (e.g, real estate, investments, retirement, etc.) to cover damages from a claim.
Who is at risk, you ask? Every time you get into your car and drive, invite guests over to your home, or interact with the general public and accidently cause some level of personal loss upon another person.
Umbrella Insurance is also known as excess liability insurance. This is mainly due to the function of how Umbrella Insurance is applied. If a policyholder is sued for damages that exceed their base coverage limits (auto, home or specialty, etc.), an Umbrella policy steps in to pay the excess amount after the policyholder's insurance limits have been exhausted.
In other words, if you are sued for $700,000 in damages resulting from an at-fault auto accident and the coverage limit on your auto insurance is $250,000, then the Umbrella insurance could steps in to pay out the balance of $500,000. Saving you from having to exhaust your savings, garnishment of your wages, being subject to a judgment levied on real estate, and/or loss of other assets.
According to Jury Verdict Research, 13% of personal injury case settlements are $1 Million or more.
Suddenly, having an Umbrella Insurance policy makes sense.
Auto accidents are not the only risks that would cause need for an Umbrella Policy.
Other risks may include, but not limited to:
Your swimming pool attracts both invited and uninvited guests, regardless of the tallest fence or the most thorough precautions.
While playing golf you hit someone causing a serious head injury
While taking your dog out for a walk they break off the leash and attack someone
A broken step or lifted paver at your home causes someone to slip and fall
Today, parents can even be sued because of something their teenagers write on Facebook.
A negative blog post about a CEO, an entertainer or anyone could result in a defamation lawsuit.
Taking your boat out on the lake and hitting another boat or skier
Burning leaves or other debris in your backyard
…And many others
How Much Do You Need?
The right umbrella amount depends on where you live, your profession, personal assets, future income, etc. Liability coverage in home and auto policies rarely exceeds $500,000; yet, as mentioned above, one lawsuit can end up costing $1 Million. In general, the amount of coverage you choose should bear some relation to your net worth.
Still uncertain whether you need an Umbrella policy?
Contact us for a complimentary needs analysis and we can help you narrow down the best, most informed, decision to protect you and your loved ones.
This content is for information purposes only and may not be applicable to all circumstances. Coverage is subject to terms, conditions and a variety of rating factors. Policy issuance is subject to qualifications by insurer underwriter.