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The Importance of Umbrella Insurance

By January 9, 2021April 6th, 2021Blog, Personal Insurance, Personal Protection

Personal umbrella insurance is designed to supplement your basic liability policies, such as your auto or home insurance by increasing the Liability limits.

Liability Insurance, whether for your home, auto or boat is designed to help protect your assets from an unforeseen event.  If another party files a lawsuit against you and your Liability limits are insufficient, an umbrella policy will help pay for the damages you’re legally responsible for that exceed the underlying Liability limits.

Here are three reasons you need umbrella insurance: 

  1. We live in a litigious society. Although you may not be responsible for an accident or injury, defending your name could get costly. Having the extra protection of an umbrella policy can protect your personal assets from lawsuits exceeding your liability limits.
  2. Accidents happen. All parents have experienced the unpredictability of kids, and an umbrella policy can safeguard the liability that comes with their sometimes-reckless actions.
  3. Life is constantly changing and prices are always going up. Sometimes even a small claim can turn into a much larger claim. A small 3 car accident in bad weather can exhaust your property damage limits quickly. Having an umbrella will help pay for any additional damage above and beyond your primary home and auto limits.

Think it can’t happen? Most people maintain $50,000 or $100,000 in property damage in their auto policy. Do you know how many cars on the road these days cost more than $50,000?

Here’s a real-life instance in which an Umbrella was needed to protect someone’s assets:

An insured’s son had a friend over for a playdate. The kids were playing with the family dog. The family dog bit the son’s friend in the face resulting in multiple reconstructive surgeries. The injured child’s parents settled for roughly $10,000,000.

Not all claims are avoidable, that is why you purchase insurance. Having an umbrella policy could prevent and limit out of pocket expenses. Rates are usually affordable and well worth the cost. If you already have umbrella coverage, it’s always a good idea to review your policy with your broker. If you do not have umbrella coverage, please contact us to learn more.  Check out our interactive graphic to learn about your unique risks.

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