If you have personal auto and homeowner’s insurance, you may be under the impression that these are the only individual 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. In today’s litigious society, it’s more important than ever to have adequate insurance coverage. An umbrella insurance policy can provide you with the extra protection you need if you are sued for damages.
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 to have underlying homeowner’s/auto policies before you can add an umbrella policy to your coverage. If you need liability insurance over 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. In sum, an umbrella insurance policy is a great way to protect your assets from unexpected risks that could otherwise cause financial devastation. Not only does it offer extra coverage for any legal costs associated with larger claims, but it can also protect against certain types of lawsuits and circumstances. If you’re worried about the potential cost of this type of insurance, remember that the peace of mind it provides may be worth more than any premium payment. Investing in an umbrella policy could give you the ultimate protection in uncertain times.
If you have questions, we’ll be glad to answer them. Visit our website for more information about us and the insurance options we offer: http://www.gross-ins.com
