Who should buy umbrella insurance?
One could define Umbrella insurance the “lawsuit insurance.” Anyone can sue you or your immediate family for personal damages. Damages can refer to physical injuries to the body or property, emotional trauma, or psychological effects.
And aside from the threat of being found guilty by the judge, you may have to cover all legal fees. With umbrella insurance, you have that added protection when your auto or home insurance (or other coverage) is tapped out.
Umbrella insurance coverage can even include slander, rental, pet, false arrest, medical, invasion of privacy, malicious prosecution, and even acts like having alcohol available in your home while your teenager is hosting a party and having to clear your name and reputation.
If you feel that any of these are a potential threat to you and your family it might be wise to at least have a conversation with your agent if umbrella insurance is right for you. Umbrella insurance benefits of having it far outweigh taking the risk of not having it.
Must you have assets to get umbrella insurance?
Umbrella insurance has a reputation. It assumes you have assets to protect that are not covered under the basic personal liability policy – and most people find out that they do have these assets (retirement, home, savings, property) but hesitate to pay for the added coverage because they don’t want to spend more than they have to on insurance.
Except, if you don’t have excess personal liability insurance, your name and reputation are exposed as are your assets.
Why Umbrella Insurance is Reassuring
The United States is a lawsuit-hungry country. People are being sued every day. The most common personal injury lawsuits are filed against defective products, auto accidents, bicycle accidents, slip and fall, work-related injuries, and assault.
In 2013, 84% of the personal injuries filed were awarded monetary damages. It is also good to know that although all states have statutes of limitations on when a personal injury lawsuit can be filed, an injured person has at least 12 months to decide whether or not to pursue a case against you. Learn about all types of coverage.
Umbrella insurance can cost as low as $216 a year (for a 1M coverage) which is a small amount to invest in when compared to potentially thousands or millions in damages.
After all, any person can claim trauma for being bumped by your bicycle and ask for $100,000 or $1 million in damages and have more than a 50/50 chance of winning.
Umbrella insurance deductibles Premium Level requirements
- How much should I have? First, getting umbrella insurance means more coverage, and more coverage means higher premiums. But how much higher cost will it be?
- Insurance requirements.Most insurance carriers will ask that policyholders carry at least $300,000 of homeowner’s insurance at least $250,000 on your auto policy. So two things will happen: 1) You have to increase limits on both auto and home owners insurance. 2) Then purchase umbrella insurance.
- Starting at around $150 a year for $1 million of coverage you can get umbrella coverage. Source: http://www.iii.org/articles/what-is-an-umbrella-liability-policy.html
- Higher deductible.Given umbrella insurance can work for liability coverage in your home and automobile most people who obtain an umbrella insurance policy will opt for 1 milion dollars in coverage per occurrence. A way to offset higher umbrella insurance premiums is to raise the deductible to a cost you are comfortable with.
Not Included in Umbrella Insurance
There are some cases though that umbrella insurance does not cover such as malpractice suits, intentional damages, business liabilities, and worker’s compensation, among others. You also cannot claim on personal property damage if the property is yours. Umbrella insurance is only applicable to damages to other people and their property.
When does umbrella insurance kick in?
Once your liability car insurance and home owners insurance is used up the umbrella insurance policy will then kick in. You will now be covered for the amount exceeding what your home and auto insurance policies covered up to 1 million more if that is the coverage you elected.
If you are convinced you need an umbrella insurance policy you will likely need to have both home and auto with the same company.
Umbrella insurance and DUIs
If you or another member of the family under the same auto and home insurance policies have a bad driving record that includes a DUI you may have to shop with another separate company. This will make it quite a bit more difficult to have a standalone policy.