If you’ve been asking yourself “Do I need umbrella insurance?” This guide will show you how how this coverage can save your skin on a rainy day.
If you’ve never heard of umbrella insurance, you may think we’re a little crazy suggesting you get coverage for your rain gear. Of course, that’s not what umbrella insurance actually is – but it is similar to rain gear, in a way.
An umbrella policy is something that goes over the top of other insurance policies you have. It offers additional liability coverage in case you are sued. You can get umbrella insurance for $1 million or more.
If you’re asking yourself “Do I need umbrella insurance,” you’re not alone. Here are some reasons it’s a good idea to get this important coverage.
People Love to Sue over Anything
It’s absolutely incredible what someone will sue you over. This is even truer if you are a highly-paid professional or someone perceives that you might have money.
Unfortunately, this means that any small incident can quickly become a liability lawsuit. Having an umbrella policy helps ensure that you have the legal defense you need. You have to get a lawyer and defend a lawsuit even if it’s completely frivolous.
If you are found liable, for whatever reason, the umbrella insurance will pay after your primary auto or homeowner’s insurance is exhausted. Given the large awards that juries could hand out, this can be really important!
Umbrella Insurance Is Very Affordable
You might think that you can’t afford coverage of $1 million or more, but the reality is that umbrella coverage is very affordable!
Because umbrella insurance is an “excess” coverage and only pays out if and when your primary liability coverage is exhausted, it’s more affordable than you would think.
When you can afford that peace of mind without breaking the bank, you should definitely take advantage of it!
Do I Need Umbrella Insurance If I’m Not Rich?
You may think that umbrella insurance is something that only applies to rich folks. Since you’re a “normal” person with an average salary, it’s not something you need to worry about.
Unfortunately, that’s not true.
Your assets are at risk any time you find yourself sued in court. Those assets include things you may not think about – your home, your retirement fund, and your car.
The court could also garnish future income and redirect it to someone else. Imagine having to go to work every day knowing that part of your hard earned money was being deposited into someone else’s banks account.
What if you’re a few years from retirement, with your home and car paid off, and a sizeable investment fund ready and waiting for you? All of that could be lost with a single court case.
You can’t afford to not be protected!
All it takes is one car accident with a car full of people, and you’re on the hook for property damage, injuries, missed time from work, punitive damages, and more. It can add up quickly.
Umbrella Coverage Protects You from Libel or Slander Charges
Most of us don’t have insurance that will help us pay for legal protection if we’re charged with libel or slander. Unfortunately, in today’s hyper-connected online world, those charges are easier to file than ever.
Libel is a written statement that causes harm to someone’s reputation or livelihood. Slander is a spoken statement that causes that kind of damage.
Imagine – you post something on Facebook about a restaurant where you had a bad experience. Unexpectedly, it picks up steam and goes viral. Suddenly, you receive court papers – you’re being sued for damaging the reputation and livelihood of the restaurant!
Even if what you said is 100% true, you have to go to court and prove it. Most of us don’t have insurance that covers that. Legal fees alone are expensive, and if you are found liable, you could be on the hook for a lot of damages.
Having an umbrella policy helps you make sure you have a legal defense and coverage if you’re ever charged with this kind of defamation. It can also protect you from cases charging you with false arrest, malicious prosecution, violation of privacy, and a variety of other civil charges.
What Does an Umbrella Policy Not Cover?
An personal umbrella policy protects you from a wide variety of legal liability claims, but there are some types that are excluded. If you want coverage for these issues, you should purchase specific insurance for that purpose.
Here are examples of what an umbrella policy doesn’t help with:
- Worker’s compensation claims against employers
- Malpractice lawsuits
- Damage caused by a business or business-related activity
- The damage that you intentionally cause to someone or their property
So, if you slash someone’s tires in anger, your umbrella policy won’t defend you. In addition, if you need worker’s compensation, malpractice, or business insurance, you want to buy those policies separately and look at a Commercial Umbrella policy.
Protect Yourself from Liability
When you bring an umbrella with you, you do it in case it rains. An umbrella policy does the same thing – it covers you in case something happens and you find yourself being sued for liability.
Some insurers require you to have specific limits on your underlying auto and homeowner’s insurance policies before you can apply for an umbrella policy. This helps make sure that your primary insurance will cover most incidents, leaving the umbrella for a truly rainy day.
Because people are happy to sue over almost any incident, getting a quote for an umbrella policy could be a life-saver. The legal protection from frivolous lawsuits alone is worth it.
In addition, you never know when an accident could exceed your current insurance limits. You’re on the hook for the extra unless you have an umbrella insurance policy!
Hopefully, by now you know the answer to the question, “Do I need umbrella insurance?” We’d love to help you get a quote. Contact us today!