Life can be unpredictable, and unexpected events can sometimes lead to big financial problems, even for careful and responsible people. While having basic insurance for your home, car, or rental property is essential, these policies might not cover everything. This is where an umbrella policy comes in handy, giving you extra protection when you need it most.
What is an Umbrella Policy?
An umbrella policy is extra insurance that goes beyond the limits of your regular policies. It acts like a safety net, covering costs that your standard insurance can’t handle. Think of it as an umbrella (extra insurance) that shields you from heavy rain (catastrophic claim). The coverage from an umbrella can be triggered by a claim on your home or auto policy.
Why Should You Get an Umbrella Policy?
Extra Coverage for Big Claims: Accidents can happen anytime, and they can be expensive. If you’re responsible for a serious car accident or someone gets hurt on your property, the injury costs might exceed your insurance limits. An umbrella policy covers those extra expenses, so you don’t have to pay out of pocket (up to the limit of the policy).
Protection Against Lawsuits: We live in a society where lawsuits are filed for all kinds of reasons. If someone sues you for defamation or because of an injury on your property, the legal fees and settlement costs can be overwhelming. Umbrella insurance helps cover these costs.
Protecting Your Assets: You’ve worked hard for your savings, investments, and property. Without an umbrella policy, a large claim could force you to sell assets or drain your savings. A judge could also order your wages to be garnished to pay a judgement.
Affordable Peace of Mind: Despite offering extensive coverage, an umbrella policy is very inexpensive and gives you additional discounts on your auto and home policies. Given the potential financial burden of a major claim, the cost of an umbrella policy is a small price to pay for significant peace of mind.
Real-Life Examples of Umbrella Policy Benefits
Imagine you’re in a car accident and found at fault. The total damage and medical bills exceed your auto insurance limits by $500,000. Without an umbrella policy, you would have to pay that amount yourself. If you have half a million dollars sitting around, wouldn’t you rather use it for you and your families benefit, instead of paying for a stranger’s injuries? With an umbrella policy, the extra costs are covered, protecting your finances (up to the policy limits).
In another scenario, if your dog bites a neighbor’s child, leading to high medical bills and a lawsuit, your homeowner’s insurance might not cover everything. If the settlement exceeds your policy limits, an umbrella policy would take care of the remaining amount, keeping your savings intact (up to the policy limits).
If you have a pool on your property and you don’t have an umbrella policy in place, get one immediately! There are so many ways that a guest can get hurt – this is a big exposure for risk.
Who Needs an Umbrella Policy?
While everyone can benefit from an umbrella policy, it’s especially important for people with significant assets, business owners, landlords, or anyone at a higher risk of being sued.
Want to learn more about umbrella policies? Contact us today! Share this post with friends and family to spread the word about the importance of extra insurance coverage. Follow us on social media for more tips on protecting your future!
We posted a blog about an umbrella insurance policy before, but since it’s been a few years, let’s review again.
In today’s world, insurance is a common aspect of financial planning. Most people have auto, home, and life insurance policies to safeguard their assets and loved ones against unexpected events. However, there’s one crucial type of coverage that often goes unnoticed but can prove to be a lifesaver in dire situations: umbrella insurance.
Picture this: You’re involved in a car accident that results in the tragic loss of life, and a jury awards the deceased’s family $900,000, factoring in the potential earnings of the victim. Or perhaps you’re helping a friend with some home improvement tasks when an accident occurs, leading to a severe injury that costs over $1.2 million in damages. These scenarios may seem improbable, but they highlight the harsh reality of personal liability claims.
This is where umbrella insurance comes into play. Essentially, it provides an additional layer of protection beyond the limits of your existing homeowner’s or auto insurance policies. With umbrella coverage, you can secure an extra $1 million or more in liability protection, shielding your assets and financial future from the potentially devastating impact of high jury awards.
Why might you need umbrella insurance? Consider this: if you have a job with significant earning potential or own assets that could be seized to satisfy a judgment, you’re at risk of facing substantial financial losses in the event of a lawsuit. An umbrella policy acts as a safety net, offering peace of mind knowing that you’re prepared for the unexpected.
Despite its extensive benefits, umbrella insurance is surprisingly affordable. The peace of mind it provides far outweighs the relatively low cost of premiums. If you need to use an umbrella policy, you are dealing with a catastrophic event! The possible financial losses can be mitigated with a simple umbrella policy.
So, do you need an umbrella policy? The answer is a resounding yes, especially if you want to ensure that your hard-earned assets and future earnings are shielded from the potentially devastating consequences of a personal liability claim.
Don’t wait until it’s too late—reach out to your insurance agent to learn more about how umbrella insurance can safeguard your financial well-being.
Most of us have auto, home, and life insurance, but having protection against a catastrophic liability claim is often overlooked.
Would you have enough coverage if something like this happened to you?
A jury awarded $900,000 to the estate of a 43 – year – old father that died after an auto accident. The award was based in part on the father’s future earning potential.
While helping a friend paint his home, a 40 – year – old man fell and broke his heel. Although the homeowner was found only partially responsible, the fall cost him $1.2 million dollars.
An umbrella policy will provide you with an additional $1 million dollars or more of coverage over and above your underlying homeowner or personal auto limits. It can offer you an extra layer of protection against the possibility of a high jury award in a personal liability case.
It is especially important to purchase this type of policy if you have wages that can be garnished or assets that can be seized to pay a judgement.
It’s an inexpensive policy with extensive benefits! Contact your insurance agent or our office for more details.
