If insurance is for a rainy day, umbrella insurance is for a storm! Umbrella insurance is for the day when someone hits you with a lawsuit for hundreds of thousands, even millions, of dollars.
Our American society is full of people who are ready to sue anyone that comes their way. They may actually have a viable reason to sure, or they may not. It doesn’t matter. Even if you do not have to pay, you could still be out of thousands of dollars in attorney fees. Anyone can get sued these days for any number of reasons. It is important that you are prepared with a quality Umbrella insurance policy.
How Far Will Your Current Protection Really Go to Protect You?
Say you're at fault in an auto accident that causes serious injuries to the driver and/or passenger(s) in the car you hit. Your auto insurance has liability limits of $100,000 per person and $300,000 per accident. (Which are pretty common limits, by the way, even for people with a lot of assets.)
How far do you think $100,000 will go, particularly if the persons involved suffer injuries that keep them from working for months, or years? The accident victims could sue you for medical bills, lost income, even pain and suffering. In this scenario, $100,000 is not nearly enough coverage.
Guess what happens if, say, you are hit with a judgment for $250,000 in the case of one person involved in the accident. Your auto liability insurance will cover the first $100,000 -- and you're stuck with the rest. Again, that doesn't include the legal fees you have to pay to your attorney.
It is these situations that have convinced us that the best option is to have a combination of insurance policies to cover your bases. After all, if you don’t have the money that is required, the court could potentially order the liquidation of your family’s assets. That includes your home, and any future earnings.
Umbrella insurance could mean the difference between a bad day in court and total devastation for your family.
Umbrella Insurance: Massive Protection for Pennies a Day
Because many people will never need to use their umbrella insurance policy, the premium is very cheap and versatile. It will cover added liability for you home renter’s or auto policies. We can also help you design a policy that will cover your boats, motorcycles, ATV’s, snowmobiles or motor home.
* Note. Umbrella insurance doesn't cover everything. For example, if you are sued and the court assesses punitive damages against you, those damages won't be paid by your umbrella insurance. What are punitive damages? They are damages awarded to someone in order to punish the person being sued. Punitive damages are awarded for outrageous, totally reckless conduct -- at least what a judge or jury perceives to be outrageous, totally reckless conduct.
Usually you can buy an umbrella policy that will cover up to $1 million for $150-$250 each year. If you need more protection than that, talk to agents and we will find something that will work for you. Think about it. For just a few hundred dollars, you can protect all that you own. That is a wise investment.
Umbrella Coverage: How It Works...
Umbrella insurance kicks in once your auto and home insurance policies limits have been reached. Say you have a per-person liability limit of $250,000 on your auto policy. Say also that you cause an accident in which a driver or passenger in the other car is ultimately awarded $450,000 for their injuries and loss of income.
Your auto policy will pay the first $250,000, and your umbrella will kick in the remaining $200,000.
Generally, because the umbrella policy sits on top of your other policies, most companies will require that you carry all of your policies with them. This can also work to your advantage because they will also offer you a hefty discount for have multiple policies with them. However, if you wish to have a “stand-alone” umbrella policy, we can find a way to work that out for you too.
Note: Most insurers offering umbrella coverage require you to have liability limits of a certain amount on your auto and homeowners policies. Typically, this minimum is $300,000 or $500,000 for homeowners and $250,000 per-person/$500,000 per accident for auto. The cost for increasing your underlying policies to these limits is fairly minimal.
Contact our agents today at Resource Insurance Group with any questions you have. We have been helping the people of Auburn with their Umbrella insurance needs since 2004 so we know how to help you. We will do everything that we can to find a policy that fits your needs and your budget. Call us today.