Umbrella insurance also makes sense for the homeowner and tenant

While debating the title of this article, I played with a variation: “For the homeowner and renter, umbrella insurance also pays ‘pennies’! You see, although you may be paying what you think is enough in your share of the policy premiums , buying umbrella coverage actually saves you a bundle should you get caught up in a lawsuit.

Read the report below and you will understand for sure.

Spotty was a lovable little mutt. As a dog of the Jones family, he had certain recognized rights, including the freedom to stretch out in comfort along the upper portion of the home’s driveway.

On a bright and sunny summer afternoon, Spotty was doing what he did best. From the vantage point in the driveway, he saw the neighbor, Mr. Smith, showing off his talents as a seasoned skater on roller skates just outside the Jones’ house. As Mr. Smith was about to make a stunning turn, he fell. The fall caused more than enough embarrassment for the ‘pro’. Mr. Smith actually suffered a physical injury – a broken leg!

The injury was so bad that surgery was warranted, the doctors said.

Mr. Smith’s medical expenses brought him about $35,000. But there was more to it. Mr. Smith’s lost wages due to time off due to the injury amounted to $1,800.

You must be wondering now what the storyline has to do with our hero, Spotty.

You may have guessed it. Mr. Smith has filed a $220,000 lawsuit against his neighbor’s Jones family. He claimed Spotty was the cause of his accident and related damage.

There is a happy ending to the story because the deciding jury believed the witnesses’ version that Mr. Jones corroborated by their testimony: the dog, Spotty, was in fact a good eight feet from Mr. Smith when the injury occurred.

A happy Mr. Jones returned to his home after the trial. But suddenly something bothered him.

What if he was wrongly convicted? Mr. Jones knew his homeowners insurance would not cover him for much of the alleged damage because of the limits on the policy. Was there a way to get coverage that would?

After talking to his agent, he understood that besides pet damage, there were numerous scenarios that could land him in trouble through a lawsuit. He decided to get an umbrella policy — coverage that would protect $1 to $5 million in case he ever needed it. Coverage that clearly made sense – as well as pennies!