First of all - if you are wondering - no, this isn’t insurance for your umbrella. Picture this more as an a shelter covering your assets like your home, car, boat or even retirement savings in the event where you’ve exceeded your liability limits.
In other words, umbrella insurance can be defined as additional liability insurance that offers worldwide protection for your personal assets. For example, suppose you get into a car accident with another driver and the damage to your car can be fully covered by your auto insurance policy. However, the damages and injuries to the other car and the passengers are much more severe. A court then rules you are at fault and says you must pay a million dollars for lost wages, damages, and medical bills. If your auto policy only covers the first $500,000, then you are kind of euchred and must fork out $500,000 of your own money. If you can’t afford this, then you are at risk of losing your assets.
This is where umbrella insurance kicks in to save your behind. This coverage is built to cover you when the worst-case scenario becomes a reality.
What’s the Cost?
Right about now you’re probably thinking this would cost you an arm and a leg on top of all your other policies you’re paying for. Well think again! Umbrella insurance works as a shield to your other policies. It’s metaphorically just like an umbrella protecting you and your clothing from getting wet. Most types of insurance provide coverage for one specific thing (homeowner’s policy for your house, auto coverage for your car, etc.). So if you exceed your liability limits, the umbrella will be there to cover you.
Usually, umbrella policies are usually sold in units of a million dollars in coverage. One unit of coverage ($1,000,000) should only cost you about an extra $1 per day. That’s it. The cost does varies with everyone, it really depends on variables like your driving record, previous lawsuits, your age and more.
Is this right for you?
It is said that umbrella insurance is a good investment for anyone who has more value in his or her assets than their liability coverage. The other big factor to consider is your risk of being sued. Say you’re a person who has to drive a lot; statistically this would make you more at risk of getting in an accident. Or say you have guests often visiting your home. This increases the chance of an injury occurring on your property. These can lead to liability lawsuits which umbrella insurance can support you with.
As stated before, umbrella insurance is set for the worst-case scenario. The problem with a worst-case scenario is you can never see them coming. So, why not protect yourself! Give us a call or come into any of our locations today to see if umbrella insurance is right for you!