What is in your rainy day fund? Some extra cash for emergencies? Enough money to cover your insurance deductibles? It is always wise to plan for the future – especially the unexpected. Insurance plays an important role in your financial security, but do you have enough? If you were served with a million-dollar lawsuit, would you have enough liability protection to cover your costs? With umbrella insurance, you can
With umbrella insurance, you can rest assured that you are protected for a wide range of liabilities that might otherwise result in years of financial repercussions.
Understanding Umbrella Insurance
Umbrella insurance is a supplemental insurance policy that is purchased in addition to your homeowners and auto insurance. Not to be confused with excess liability coverage, which merely extends your existing liability limits, a true umbrella insurance policy is less restrictive, offering additional coverage for personal liabilities that are often excluded from homeowners and auto insurance, such as libel, slander, and false arrest.
The coverage comes with high limits, usually starting at $1 million. While that may seem like a lot, all it takes is one major car accident or injury to result in a lawsuit. Once the limits on your primary liability coverage are exhausted, your umbrella insurance kicks in, picking up where your homeowners or auto insurance left off.
Since umbrella insurance is supplemental coverage, it is likely that your carrier will require you to also carry a minimum amount of home and auto liability protection before issuing additional coverage.
These limits are typically:
- $300,000 or $500,000 homeowner liability
- $250,000/$500,000 auto bodily injury liability OR
- $300,000 combined single limit (CSL)
If your current coverage does not meet these requirements, an agent here at Tagge Insurance can help you raise your limits. We can also show you how an umbrella policy can be an affordable addition to your insurance portfolio, with $1 million policies starting at approximately $200 per year or less. Additional coverage is also available in $1 million increments, and it typically becomes more affordable the more coverage you add.
What is Your Liability Risk?
Anyone can be sued in today’s litigious society. Simply driving a car or inviting someone over to your home increases your risk of incurring liability. For example, what would happen if your teen daughter held a sleepover in your home and one of her guests tripped and took a severe tumble down the stairs in your home? With several fractures and broken vertebrae, she is restricted from physical activity and loses her volleyball scholarship. Her family sues you for medical bills, pain and suffering, and the value of the lost scholarship. Your homeowners insurance covers the first $300,000, but the remainder of the judgment against you leaves you with an additional $500,000 to pay out of pocket.
With umbrella insurance, you are covered for the additional liability. Without it, you might have to liquidate your savings, assets, and make payments from your future wages to help satisfy the judgment.
Have you ever considered umbrella insurance as a means of protecting your financial future? We recommend talking to one of our team members about your liability exposure and coverage needs. Call us today for more information. We look forward to serving you soon.