If you have personal auto and homeowner’s insurance, you may be under the impression that these are the only personal insurance policies you need. You may be correct; however, if you have assets totaling more than $1 million, you may need a special type of insurance called umbrella insurance, to protect your personal assets from a lawsuit.
The limits of an umbrella policy well exceed the maximum limits on your homeowner’s and auto policies. If you are found to be at fault in an auto accident that causes death and property loss, a jury could award well into the millions. The same would apply to an accident that happens to a guest in your home who is injured and ultimately sues you. The umbrella policy picks up coverage where your regular homeowner’s/auto policies have reached their maximum limits.
Most insurers are going to require you have underlying homeowner’s/auto policies before you are able to add an umbrella policy to your coverage. If you need liability insurance in excess of what your regular auto/homeowner’s insurer offers in an umbrella policy, you may be able to purchase a stand-alone umbrella insurance policy to get the excess liability coverage you need. Most insurers only offer umbrella policies in limits ranging from $2 million to $5 million to be added on to an auto or homeowner’s policy. If you need more coverage, this is where a stand-alone umbrella policy would come in.
An umbrella policy offers protection from lawsuits involving:
- Property Damage: If you destroy another person’s vehicle or property in an at-fault auto accident, the umbrella policy picks up coverage when your auto policy has reached its maximum limit.
- Bodily Injury: If others are injured while at your home, the umbrella policy may cover medical and other costs after your homeowner’s liability limits have been reached.
- Libel/Slander: You can be sued for something you write or say about another person. An umbrella policy may cover your legal defense.
- Malicious Prosecution: If you file a wrongful lawsuit, the other person could potentially sue you. The umbrella policy may pay for your defense costs for malicious prosecution.
The bottom line is this—if you have assets totaling $1 million or more and want to be protected from potential lawsuits—you should consider the benefits of umbrella insurance. Contact us and we’ll be glad to explain all of your options. http://www.gross-ins.com
