An Umbrella Insurance policy provides protection for you over and above your homeowner and auto insurance policies. Because it covers you over and above your other insurance policies it is aptly named – Umbrella. Your auto and homeowner insurance policies provide liability protection but perhaps not as much as you want or need.
Liability protection is a coverage on your auto and homeowner insurance that gives you protection against the lawsuits by others against you. Home insurance and auto insurance policies have maximum limits of how much coverage they provide and why some people need to consider supplementing an Umbrella policy.
We all are aware of the dangers of running into another vehicle and causing injury to those other occupants. Imagine hitting a kid on a bike or running over a pedestrian. In your home, someone could fall or get hurt in other ways. In all likelihood you would be sued for damages in all cases. The other party would hire legal counsel and would force you to provide an accounting of your assets as well as income. The other attorney would know exactly what you are worth and what income you receive from all sources.
The liability protection in your auto insurance and homeowner insurance would provided immediate protection. But both have maximum limits. An Umbrella policy would then be able to provide protection over and above your auto and homeowner insurance limits.
Who needs an Umbrella policy?
Anyone with assets or an income they want to protect. Usually, an Umbrella policy is considered a wealthy-person’s insurance policy. But it’s not true. This coverage is for anyone who wants to be protected from the risks of getting sued and their assets being attacked legally. Do you own a home? Do you make a decent income? Do you have investments? Do you own a business? Do you own a note receivable? These are a few questions that pertain to whether you should consider purchasing an Umbrella policy.
Imagine an umbrella policy as something that protects in the event of the worst possible legal situation. Perhaps someone got injured on your property and felt you were negligent in some way. Or you hit another vehicle, are at-fault and caused injury or death. Those other parties would likely sue you. It happens. Especially if you have assets or make a higher income you can bank on getting sued. If the other party hires an attorney and files a lawsuit against you the first thing they will probably do is (by court order) have you provide a listing of all your money and assets.
If you want to protect what you have – get an umbrella policy.
How much does an Umbrella policy cost?
A basic Umbrella Insurance policy can cost a few hundred dollars per year. However, if you have multiple drivers in the household (or teen drivers) or own multiple homes, a recreational vehicle, ATV’s, a motorcycle or boat this rate can go up. The more toys you have the more premium you will pay. Still, for the protection that you receive from an Umbrella Insurance policy it is one of the best values an insured can receive.
If you are interested in receiving a quote for a Umbrella Insurance policy please contact us for a free, no obligation quote.
Gary Brown, Agent/Owner