You probably carry an umbrella in your car, regardless of what the weather forecast may say. After all, you never know when you could get caught in a downpour. Just like unexpected showers, sometimes in life, accidents happen, too. Umbrella insurance gives you the personal liability protection you need to weather the biggest of storms. Without it, a lawsuit could threaten everything you have and cause financial consequences for many years to come.
Who Needs Umbrella Insurance?
If you have assets or future income that needs to be protected, you may need umbrella insurance. Risks are everywhere, from your home to your car and even on the Internet. Lawsuits are common in today’s litigious society, putting everyone at risk.
- Do you or will you have a teen driver in your home?
- Are you the landlord of a rental property?
- Does anyone in your family use social media?
- Do you own a swimming pool?
- Do you have a dog?
- Is your house the place for family gatherings or parties?
- Do you commute to work or school?
- Do you ever travel outside the country?
If you answered yes to any of these questions, you could be at increased risk of a lawsuit. Judgments made against you for damages you cause can be recovered through your home or auto insurance. Once those limits are reached, however, you will be personally responsible for any remaining damages.
That means you might have to pay hundreds of thousands of dollars in out-of-pocket costs via your savings accounts, investments, liquidation of assets, and even garnishment of your future wages. Even if you win your case, there will be legal fees and defense costs to pay, all of which could otherwise be covered by your personal liability insurance.
Choosing the Right Policy
Umbrella insurance is different from ‘excess liability coverage,’ though the two terms are often used interchangeably. Excess liability coverage is more restrictive and merely extends the limits on your existing coverage. A true umbrella insurance policy will provide extended liability coverage beyond the limits on your primary policies, and it will also provide broadened protections that may be excluded in other types of coverage. Examples include liability coverage for damages you cause when traveling overseas or accusations of libel or slander.
We recommend contacting an independent agent here at Smith Insurance and Financial Services before purchasing umbrella insurance. There are many factors to consider when determining how much coverage you might need and which carrier to purchase your coverage from.
Our team can help answer any questions you may have and help calculate your personal risk exposure. Umbrella policies typically start at $200 per year for $1 million in coverage and tend to become more affordable with each addition million you add in coverage.
Keep in mind that most umbrella insurance issuers require you to have a minimum of:
- $300,000 or $500,000 homeowners liability
- $250,000/$500,000 auto bodily injury liability OR
- $300,000 combined single limit (CSL)
We can help you meet the coverage requirements of your insurer if your current limits are too low. Be sure to also ask about how you can save on coverage by purchasing your umbrella and homeowners insurance from the same carrier.
Do you know how much personal liability protection you need?