There’s A Lot More At Risk Than You Think
Posted on Wed, Nov 02, 2011
Umbrella Insurance Can Help Protect You and Your Family’s Lifestyle and Future
You’ve worked hard to establish your family, home and retirement. It’s important to protect you and your family's present and future. Unfortunately, there are far too many instances of people suing one another. One law suit could cost you your future.
Umbrella insurance, also known as excess liability insurance, is a broad policy that you purchase in addition to your regular insurance policies such as auto insurance and homeowners insurance. As its name implies, umbrella insurance sits "on top of" your other insurance policies like an umbrella and kicks in when your other insurance maxes out. It can protect your life savings from all kinds of claims – including some your auto or homeowner policies don’t cover.
Being wealthy isn't a prerequisite for needing umbrella insurance. Anyone can be sued for any reason at any time, and umbrella insurance provides added protection against losses.
What’s at Risk?
Even if you’ve purchased substantial liability limits on your auto or home insurance, it may not be enough to adequately protect you. Juries reach decisions resulting in awards of many hundreds of thousands and millions of dollars all the time. Your assets, your college fund, your nest egg, your retirement savings — they could be at risk from legal liability claims without the right level of coverage. Did you know that courts can force the sale of your home and other assets not to mention attach your future earnings?
How an Umbrella Policy Works
Consider this scenario: You're sued for $1 million after an auto accident or an incident on your home or property. But your home or auto liability limit only covers up to $250,000 in damages. Who's responsible for the other $750,000 if you're ordered to pay it? You are — unless you have Personal Umbrella insurance.
With a personal umbrella policy, your auto or homeowners insurance policy would pay the first $250,000 and then your umbrella policy would cover the remaining $750,000. Personal umbrella insurance covers you and your family by paying claims that exceed the liability limits of your existing auto or homeowners policy.
Most insurance companies require a minimum level of liability coverage on your auto, home or other primary liability policies before you can be eligible to purchase umbrella policy protection. Umbrella policies are available in increments of $1 million ranging from $1 - $10 million.