If you own a home or car, you know about insurance. Not only are those polices generally required, but they do give us peace of mind in the event something happens. But what do we do if that something happens and it’s so devastating leaving our existing policy short of coverage? Let me introduce you to an umbrella policy. An umbrella insurance policy provides extra liability coverage. It provides additional coverage over the limits of your existing policies. In the event of a major claim or law suit, it will help protect your assets.
Here’s an example for you to consider. If you are in a car accident that is determined to be your fault and the other driver suffers severe injuries. The other driver is out of work for a few months then decides to sue. Your policy limit is $300,000 but the entire claim reaches $500,000. Where will the $200,000 come from? Bank accounts? Investments? Out of pocket? This is where the umbrella policy will come in to provide that excess coverage. The policy covers more than bodily injuries, it covers libel or slander (i.e. writing or saying something about another person), significant property damage, legal fees associated with the lawsuit or even a negative social media post about a product.
Sounds great but how much coverage do I get and how much will it cost? The policies are relatively inexpensive for their coverage limits. The policy will cost between $150 – $300 per year. Next question then is how much excess liability coverage does that buy? Policy coverage starts at $1 million up to $5 million for the average person. The cost benefit ratio seems clear. What else should you think about before purchasing this additional coverage? Can someone trip or take a serious fall on your property? Do you have a dog – a dog bite would be covered. Do you own any recreational vehicles like a boat that you enjoy with family and friends? Ever have any work done around the house – what happens if the handyman gets hurts on your property?
Are you ready yet to consider purchasing additional peace of mind for you and your family? Call your current insurer and ask what they offer. You will have to answer a few questions about your existing policies and their limits. Get a rate and then call around and compare. We all know the expression, when it rain, it pours, so be prepared for a downpour.