You have a homeowners policy with $300,000 in liability coverage. You have heard that umbrella insurance is something you might need to help supplement your primary liability insurance, but with an average income and assets, why would you ever need that much coverage?
The truth is an umbrella policy could be the very thing that helps keep your finances and plans for the future on track after an accident or other unexpected events that leave you liable for a victim’s injuries and property loss. Continue reading to find out how just $200 per year could be the most valuable investment you ever make in your family’s future.
What is Umbrella Insurance and Why Do You Need It?
Umbrella insurance is supplemental personal liability insurance that is secondary to your primary insurance coverage. If you are sued, your homeowners or auto insurance will probably cover the damages. If you are sued for a major loss, such as an accidental death or multiple injuries, however, the limits on your primary insurance might not be enough to cover the costs. In this case, umbrella insurance picks up where your home or auto insurance leaves off, paying an additional $1 million or more in damages.
Without umbrella insurance, you are still liable for any damages that remain beyond that which is covered in your home or auto insurance. A victim could choose to pursue any assets you may have, including your savings accounts, investments, a second home, and perhaps even the money you set aside to put a child through college.
Even if you have few or no assets, you could be liable for paying excess damages from your future income. As long as you have the ability to earn a wage, you probably need umbrella insurance. Financial experts suggest a minimum of $1 million in coverage for nearly everyone, although some will need as much as $5 million or more depending on income and assets.
Keep in mind that umbrella insurance not only builds upon your existing coverage but can also provide additional types of liability protection you may not already have. For example, a true umbrella policy might also provide primary coverage for things like slander, false arrest, and damages you cause while traveling outside the country – none of which are typically covered by homeowners insurance.
It is important to talk with an independent agent here at Mid-Rivers Insurance to ensure you are getting a true umbrella policy and not just extended liability coverage.
It Could Happen to You
Major lawsuits may be rare in relation to population size, but they do happen. Anytime you get behind the wheel of your car; you are putting yourself at risk of a liability. If a guest visits your home, just one slip-and-fall incident could land you in court. Of course, certain factors can further increase your risk of being sued. Examples include:
- Owning a swimming pool
- Hosting parties in your home
- Owning a rental property occupied by tenants
- Having a teen driver in your household
- Owning a dog
- Being active on social media
- Traveling abroad
How to Protect Yourself
The first step to protecting your income and assets against a lawsuit is talking with an independent agent here at Mid-Rivers Insurance. Together, we can evaluate your current risk exposure and determine how much umbrella insurance you might need to close the gaps left behind by your primary insurance.
We can also bring the limits on your primary policies up to the values usually required by umbrella insurance issuers. These typically include:
- $300,000 or $500,000 homeowners liability
- $250,000/$500,000 auto bodily injury liability OR
- $300,000 combined single limit (CSL)
Finally, we can help you find ways to save on coverage by shopping around on your behalf and finding discounts if you purchase your homeowners and umbrella policies from the same carrier. In many cases, a $1 million umbrella insurance policy can be purchased for as little as $200 per year through our agency.
Do you have umbrella insurance? For more information or to request your free quote, contact us today.