Regardless of how much money you make, you can never have too much liability protection. Umbrella insurance is a stand-alone policy that works like add-on liability protection for other types of insurance coverage. If you think of the liability limits on your home, auto, boat, RV, and other insurance policies as small safety nets beneath you against accidents at home, on the road, and on the water, umbrella insurance can be thought of as an even bigger safety net beneath the smaller ones that serves as back-up protection, just in case.
Sometimes accidents happen — including those outside our control. Whether your dog kills your neighbor’s chickens or your child injures another child on the playground, it is important to consider the potential risks and repercussions you face in everyday life. When making the decision to purchase umbrella insurance, ask yourself the following questions:
- Do you fear being sued?
- What is your plan to protect yourself if you are responsible for an injury, property damage, slander, or some other type of loss?
- Do you have a lot of assets that could be vulnerable in a lawsuit?
- Do you have income that could be vulnerable in a lawsuit?
- Are the liability limits on your existing insurance policies enough to cover legal fees and potential judgments against you?
Umbrella Insurance: What’s Covered?
Umbrella insurance can protect you against major claims that could be disastrous to your finances, both present and future. It is designed to kick in once you have exhausted the limits on another type of policy. In general, umbrella insurance covers costs related to several types of claims. These costs can stem from a victim’s bodily injuries, property damages, and your legal defense fees. In some cases, it can even cover liability claims that are not covered by any other types of insurance you may have, such as:
- False arrest or imprisonment
- Rental property liability
- Claims against you when traveling abroad
Umbrella Insurance Quotes
Most insurers sell umbrella insurance in increments of $1 million. While it may sound excessive, it is not uncommon for lawsuits to seek damages worth millions of dollars. In fact, more than 1 in 10 personal injury cases settle for $1 million or more. If you only have $300,000 in bodily injury liability on your auto insurance policy, you could one day find yourself responsible for paying another person’s claims out of your own pocket. It is worth noting that most insurers will require policy-holders to have a certain amount of liability protection on existing insurance policies before issuing an umbrella policy.
Umbrella insurance typically costs much less than one might think. On average, a couple might pay less for umbrella insurance than they would for dinner at a casual restaurant. That is a small price to pay to protect everything you have worked so hard to attain and the goals you are working toward in the future.
Here at Mid Rivers Insurance, we provide in-depth risk analysis for our clients. We work with you on a personal basis to evaluate your risk exposure and your potential vulnerability in a lawsuit. We can help you understand how different at-fault scenarios, such as major auto accidents or injuries occurring in your home, could affect your savings accounts, assets, and income. We can also make a recommendation for coverage based on your individual needs.