Insurance helps protect you against possible losses – especially liability damages. In fact, Americans are the most underinsured in the area of personal liability, which can sometimes yield judgments of hundreds of thousands and even millions of dollars.
Home and auto liability are a great start, but they do not cover everything, and they often fall short of the coverage you really need. So what would happen to you if a lawsuit threatened to take away everything you have and hope to have in the future?
Your Personal Liability
Personal liability lawsuits have resulted in financial ruin for many well-intentioned people. For example, imagine a nurse who falls asleep at the wheel after a long shift and causes a multi-car collision. The property damages, medical bills, and long-term recovery costs total over a million dollars in liability, not to mention legal fees and defense costs. The nurse’s auto insurance covers up to $500,000 in total bodily injury damages, which leaves her with hundreds of thousands of dollars in remaining damages. The victim decides to pursue the nurse’s savings accounts, as well as her future income for reparation of damages.
Umbrella insurance is supplemental liability protection for damages that exceed the limits on your primary insurance policies. In the case of the nurse, a $1 million umbrella policy would have been more than enough to pick up where her auto insurance left off, covering any excess property damage and bodily injury judgments, as well as her legal fees.
Unfortunately, many people choose to forego this important insurance, either because they do not understand it or they do not think they need it. That is a shame; especially considering that a $1 million umbrella policy can be had for around $200 or less per year.
Of course, it is not just car accidents that can induce a major liability. Someone could sue you for an injury that occurs at your home or if your pet bites their child. You could be sued if your teenager posts defamatory comments on social media or if you cause damages to a boat you rent on vacation while traveling abroad. There is no end to the number of scenarios in which umbrella insurance could prove useful.
Should You Get Umbrella Insurance?
Chances are you can benefit from umbrella insurance – especially if you have any savings, assets, or future income to protect. Will you receive an inheritance? Do you have the ability to earn a wage? Have you saved up for a child’s college education? Nearly anything you own and will own could be at risk in a lawsuit if you do not have the right coverage.
We recommend talking with an independent agent here at Stauffer-Klug Insurance when shopping for personal liability coverage. We can help you obtain a true umbrella policy – not just excess liability insurance.
A true liability policy provides extended liability limits as well as broader protections for things like slander, libel, and false arrest. However, you may have to meet certain requirements before a carrier will issue coverage.
These typically include minimum home and auto liability coverage limits of:
- $300,000 or $500,000 homeowners liability coverage
- $250,000/$500,000 auto bodily injury coverage OR
- $300,000 combined single limit (CSL)
You may also qualify for additional savings if you purchase your home and umbrella insurance from the same carrier. Contact us today for more information and to request your free quotes.
How much personal liability insurance protection do you have?