Umbrella Policies: Above & Beyond Your Standard Insurance
If you've ever had a serious accident, you know the financial and physical
repercussions that follow. Whether injured in your automobile, at work, at home
or one of a million other places, a serious injury can deplete your resources
and leave you wondering how you'll ever make ends meet, let alone pay your
bills.
But this ripple effect reaches others, too. What if someone else dies, or is
gravely injured in the accident? Are you legally responsible for their
expenses, too?
If you are at fault, the short answer is "yes." But that's why you
have auto and home liability insurance: to protect yourself and others from the
unexpected.
However, every insurance policy has limits. What happens when you pass them,
the bills are still piling up and you're hopelessly in debt?
That's where an umbrella policy comes in. So called because of its function,
umbrella insurance "covers" you where your home or auto insurance
liability coverage leaves off, paying for items like medical bills, lost wages,
legal fees and property damage.
Consider it financial catastrophe protection—and psychological comfort—just
when you need it most.
Minimizing
Cost
Sold separately from other insurance policies, umbrella insurance goes above
and beyond standard auto or home insurance by providing additional liability
coverage at a reasonable price. In fact, a $1 million policy of this type can
be purchased for only $150-$300 per year, according to the Insurance
Information Institute’s answer to the FAQ Should I purchase an umbrella liability
policy? (III).
The actual rate you pay depends, of course, on the coverage level you
choose, the insurer you pick and your own personal "risk factors"
(things like your driving record and credit history). But overall, umbrella
coverage is relatively inexpensive and provides extra protection most of us
need.
Who Needs
It?
If your assets exceed your insurance coverage, you're not fully protected
and should consider an umbrella policy.
But how can you know for sure? Follow these steps to find out:
Step #1:
Add up your assets. Include savings, your home's value, stocks and bonds,
retirement monies, 401k funds and the like.
Step #2:
Check your auto and home owner policies for liability coverage limits.
Step #3:
If your current limits aren't large enough to cover your assets, you need an
umbrella policy.
If you find yourself in this dilemma, talk to a licensed insurance agent for
advice. Agents like those on the InsureMe network can help you decide how much
extra coverage you need—and provide the most affordable quotes to get you
there.
Covering
the Unexpected
To help you understand how an umbrella policy works, below are some
theoretical situations in which a policy of this type would come in handy:
- Someone slips and gets hurt
on your property
- You're sued for negligence
following a car accident
- A tree on your property falls
on someone or their car
- You must hire a lawyer to
defend yourself against libel or slander
Since no one ever expects these things to happen, it's wise to
prepare now with an umbrella insurance policy. It might just keep your
budget intact—and you and your family safe and dry.
Protecting
Your Interests
Did you know that, without enough liability insurance, you could lose your
home, see your assets seized, lose your inheritance, have your wages garnished
and still owe your debtors money?
