How much liability coverage do you have? Chances are you have hundreds of thousands of dollars in protection between your auto insurance and the coverage on your homeowner, renter, or condo insurance. While it may sound like a lot, there is a very real possibility it is not enough – even if you opted for the highest limits available from your carrier. In the event of a million-dollar lawsuit, such as after a car accident, your coverage could fall short, leaving you with the balance. How would you pay?
Why You Need Umbrella Insurance
Umbrella insurance is high-limit supplemental liability protection that picks up where your primary liability insurance leaves off. Once the limits are exhausted on your home or auto liability, your umbrella insurance can be used to satisfy any judgments, pay your legal fees, and protect you from financial ruin. And unlike excess liability coverage, which merely extends your liability limits, umbrella insurance can also provide added protection for liabilities not covered by your primary coverage, such as slander, libel, and false arrest.
Everyone is at risk of a lawsuit, regardless of how careful you may be. Without an umbrella policy to backup your primary coverage, you could be on the hook for hundreds of thousands of dollars if:
- Your teenage driver hits a cyclist at an intersection
- Your dog attacks a small child or a neighbor’s pet
- A guest becomes severely injured while visiting your home
If a judgment is made against you, your primary liability insurance will pay first. Once those limits are reached, you can either rely on your umbrella policy or otherwise pay for the damages via other means. Perhaps you will have to dip into your investments or college savings accounts. Maybe you will need to sell your boat or ATV. Perhaps you will be forced to make large payments from your income and inheritance for years to come. However you pay it, a large lawsuit is sure to put a big dent in the plans you have for your family’s future.
Umbrella insurance is typically sold in $1 million increments, with between $1 million and $5 million available for the average policy-holder. If you have more assets or future income to protect, higher limits may be available. Keep in mind that most insurance carriers require a minimum amount of home and auto liability protection before issuing umbrella coverage. If you do not meet these minimum standards of coverage, you may need to contact an agent here at Van De Hey Insurance to add additional liability protection to your policy.
These minimum limits are typically:
- $300,000 or $500,000 homeowner liability
- $250,000/$500,000 auto bodily injury liability OR
- $300,000 combined single limit (CSL)
Shopping for Umbrella Insurance
It is always wise to shop for umbrella insurance through an independent agent here at Van De Hey Insurance. Our knowledgeable team will get to know your unique risks and calculate the amount of coverage that could be right for you. We can also answer any questions you may have and show you how to achieve additional savings by purchasing you umbrella and homeowners insurance from the same carrier.
How would you pay for your liability in a major lawsuit?