You’ve purchased insurance for all of your assets, crossing every T and dotting every I. You assume that you are covered not matter what happens – even if you are sued for every penny you have. The question is, do you know how much liability protection you really need? Many people do not have a clear understanding of their liability coverage or the limits on their auto, home and recreational vehicle policies. They are also not aware that an umbrella insurance policy could provide backup when the lights go out on an insurance policy. Unfortunately, staying in the dark on liability insurance is risky business that could cost everything.
Take the following story, for example:
A Green Bay man in his late 50s spent the past three decades paying off a home and saving for retirement. With a million dollar net worth, he is all set to tackle his dream of traveling with his wife during retirement. A blizzard blows through Wisconsin, causing hazardous driving conditions and low visibility. He inadvertently runs a red light, smashing into the vehicle of a young doctor who just opened a practice.
The man is okay, but the victim inside the other vehicle is severely disabled, forcing him out of work. The victim not only sues the man for medical bills and vehicle damages, but also for a lifetime of lost wages – a judgment that amounts to over two million dollars. With the maximum liability on his auto insurance exhausted at $500,000, the man is forced to liquidate his savings and take out a second mortgage to pay the remainder of the judgment. If he had umbrella insurance, his dream of retirement would still be on track.
Do You Need Umbrella Insurance?
The truth is that umbrella insurance is not just for wealthy people with a lot of assets; it is for the everyday blue collar worker, too. Even if you do not have a penny in the bank, a judgment against you could result in the garnishment of your future wages. The low cost of umbrella insurance is a small price to pay for peace of mind.
Did your son forget to shovel the snow of your walkway outside? Umbrella insurance helps protect you if someone slips and falls. Did your neighbor’s daughter fall down your stairs and break her arm? Look to your umbrella insurance for help.
Umbrella insurance coverage and limits vary from insurer to insurer, but generally include additional liability above and beyond the limits on a homeowner, auto, and recreational vehicle policies. It can also extend coverage not available in these types of policies, such as insurance against slander and defamation claims. That means that if you are sued, your umbrella insurance works together with your existing policies to pay for injuries, property damages, legal defense fees, and more.
Typically, umbrella insurance can be purchased at a fraction of the cost of other policies, with liability limits starting at around $1 million. Often, premiums become less expensive for each additional million dollars of coverage added to the policy.
If you would like more information about umbrella insurance and the types of situations it covers, contact our office. We can evaluate your risk and help you determine if umbrella insurance could be right for you. Call us today. We look forward to serving you soon.