Do you need umbrella insurance?

Figuring out how much insurance you need and what kind can be a daunting prospect. If you’ve ever bought homeowners insurance, you may have been asked if you want an umbrella policy as part of your insurance coverage. To get the best coverage possible and to protect yourself against unforeseen circumstances that may not be covered by a normal policy, it may be necessary to add additional liability coverage in the form of umbrella insurance to your car and contents insurance policy to give you and protect your family.

This is why.

Protection against lawsuits

Kiplinger recommends that you have at least a $1 million umbrella policy to provide liability coverage beyond your auto and homeowners insurance policies, even if you have less than $1 million in assets. If someone ever sues you and you don’t have this overarching policy, you could be responsible for paying legal fees on both current and future assets. Even if you end up winning the case, the legal costs will eat into the settlement because they add up so quickly. It’s wise to get liability insurance equal to your net worth in total — more if you can afford it. This additional litigation coverage covers both defense costs and liability coverage for lawsuits not covered by your auto or home insurance. More broadly, umbrella policies provide cover that goes beyond your normal cover and provide:

· Property damage liability

· Slander/libel

· Liability for bodily injury

· Legal costs and defense

You never know…

It is impossible to say if, when and who you will injure in the future, be it from a car accident or some other scenario. Just think of this possible example: you injure a professional athlete, CEO, or doctor. Maybe their injuries will prevent them from working for 10 years. You would be responsible for paying their lost wages, medical bills, and compensation for pain and suffering, with lost wages alone starting at $3 million and increasing from there, says Bankrate. It’s better to buy an umbrella policy now, with at least $1 million in coverage, than to be left with the bag later. If and when something happens and you don’t have an overarching policy, it’s too late to add another one.

Peace of mind

If you’re concerned about losing income and assets from a potential lawsuit, you need an overarching policy. Considered a wise purchase in the insurance industry this is one of those things that isn’t very exciting to buy at first like a new car or holiday but it gives you immeasurable peace of mind knowing that if you had to use it it there is and it will protect you. Plan to pay between $150 and $200 for the first $1 million of coverage, then about $100 for every $1 million you add. Want to know more about umbrella insurance? Contact us today to speak to a representative and find out how you can benefit!