In today’s litigious society, it’s important to have additional liability coverage to protect you and your family. Unfortunately, liability limits of your home and auto insurance may not be enough to cover larger accidents or claims. And did you know, a court or jury could make you pay not only from your current assets, but also from future wages! That’s where umbrella insurance comes in.
While many people think umbrella insurance is just for the wealthy, you will see that there are many circumstances that warrant the purchase of an umbrella policy, no matter the size of your bank account.
As with all types of insurance, it’s important to understand how personal umbrella insurance works, its costs and limitations when deciding if you need this type of insurance.
Personal Umbrella insurance can help you pay for expenses that exceed the limits of your other insurance policies, which makes it a source of peace of mind and protection of your hard-earned assets.
Umbrella insurance also protects you if your wages are ever garnished, meaning a court has issued an order requiring your employer to withhold a certain amount from your future paychecks. Here is more information about wage garnishment.
Umbrella insurance can also provide coverage for other risks that aren’t covered by other policies, such as, false arrest, libel, slander, and liability on rental units that you may own.
Do I Need Personal Umbrella Insurance?
Assessing your potential need for umbrella insurance begins with asking some basic questions about you and your family’s lifestyle, finances, and overall risk.
Here are some basic questions to ask yourself to determine your potential need of an umbrella policy:
If you answered yes to any of these questions, you can benefit from an umbrella insurance policy.
It’s important to remember that a lawsuit could come after not only your current assets, but also your future earnings in the form of a wage garnishment. So, everyone should highly consider obtaining umbrella insurance to protect their families.
We can help you assess your risks and determine if an umbrella policy is right for you.
Once your home, auto, or other underlying policy has paid out the maximum liability amount, umbrella insurance can cover the following:
What are some examples where claims have exceeded $300,000 and an umbrella policy would kick in?
In the event of a lawsuit, umbrella insurance will also cover legal fees, which can be a significant benefit given the costs of litigation.
What is Not Covered by Personal Umbrella Insurance?
While umbrella insurance is designed as a sort of catch-all, there are some risks it will not cover:
The rule of thumb to remember is that umbrella insurance will help with accidental or negligent damages that are not related to business activity.
How Much Personal Umbrella Insurance Should I Carry?
As we’ve discussed, it’s important everyone at least obtain a minimum amount of umbrella insurance to not only protect your current assets, but also to protect you and your family’s future earnings.
To determine, how much umbrella insurance is needed, here a few things to consider:
Given the relatively inexpensive nature of adding a $1,000,000 umbrella policy, it might make sense to cover the full amount of your current assets and some room to grow.
Your Texan Insurance agent can help you assess your risk factors and needed coverage, and we can reassess it every year to make sure that your coverage stays current based on your needs.
What is the Cost of Umbrella Insurance?
Many people are surprised at the relatively low cost of umbrella insurance. The coverage is sold in increments of $1 million, up to $10 million
The first $1 million usually costs $300 per year or less, and additional $1 million increments can be as low as $100 per year. Because of its relatively low cost, umbrella insurance is considered to be one of the best insurance values.
As with most insurance, your personal risk profile will impact your cost. Factors like your hobbies, your job, the type and number of pets you own, your driving record, and your record of past lawsuits will affect the price you pay.
We want to protect what matters most to you. Call us at 281-998-2500 for immediate assistance or click below to find out we can get you protected.