You have auto insurance for your car. And you have home owner’s insurance for your home. Maybe you even have motorcycle or boat insurance, depending on what types of vehicles you own. But do you have an umbrella policy?
Assuming that you’re completely covered just because you have the standard policies required by law (such as car insurance) doesn’t mean that you aren’t financially liable beyond what your insurer pays for.
Here’s where an umbrella policy comes into play. This type of insurance is a liability policy that can help to keep you safe after you exhaust the limits of your other policies. In the event of a lawsuit, or excessive damages that are your responsibility to pay, an umbrella policy offers protections that you need. Take a look at the benefits of this insurance option and what it typically covers.
In the event that you get in an auto accident or someone slips and falls on your property, you probably assume you have insurance to cover the damages. It seems logical that the monthly, semi-annual or annual premiums you pay will protect you from having to use your own money for these types of incidents. However, this may not always be the case.
If damages go above your insurance limits, you’re responsible to pay the difference. This means that the injured party may choose (or need to) come after your personal assets to offset the costs — including any savings that you have or your home (depending on the costs and the value of your property).
While umbrella coverage won’t protect you from a lawsuit itself, this coverage option can help you to save your money if someone sues you. Keep in mind, umbrella insurance won’t cover everything. But, depending on your coverage, it can pay for some of your legal fees related to an accident or incident that another party accuses you of causing.
Paying at attorney out-of-pocket can cost almost as much as the money you owe after you’ve maximized the amount your insurance company will pay. An umbrella policy may pay for the legal costs you incur in the process of trying to protect your remaining assets. This can help particularly if the legal process takes a long time. You won’t have to be as worried about a long court process draining your finances while you wait for an outcome.
Insurance is a type of protection that offers you peace of mind. You feel comfortable that you won’t have to sell your car to pay for the accident that it caused. But if you have a high net-worth, you might still worry that an incident that extends beyond the scope of your auto or homeowners insurance may still pack a financial punch.
If you don’t have assets for anyone to take, you don’t have a reason to feel anxious about money-seeking lawsuits. Someone can’t take what you don’t have. But if you do have the money or assets to take, you may feel anxious about the possibility of losing it if something unexpected were to happen.
An umbrella policy isn’t something that anyone wants to use. Even though you’d prefer to pay for it and never have to see the results, the psychological impact of having this type of safety net is priceless. You’ve worked hard for your money. Having someone take it from you is a psychologically and emotionally crushing outcome that is all too real of a possibility.
Do you have auto and homeowners insurance? Do you need the added protection of an umbrella policy? Contact Family Insurance Centers to get help finding the coverage that’s right for you.