What is Umbrella Insurance and Why Do I Need It?

You need an umbrella even in the dry season. Of course, we are speaking of an insurance umbrella. It may be the dry season now, but we need umbrella protection more than ever before. An umbrella is essential equipment in a society that has become more and more litigious. Even if you aren’t a millionaire, it is not uncommon to be sued like one.

Consider the following:

  • It is not a juror’s primary concern that one has or does not have the ability to pay a million-dollar judgment
  • You still must pay legal costs to defend yourself, even if you were not in the wrong.
  • You can lose nearly everything you currently own and have the liability continue into your future

An insurance umbrella policy is a policy that provides liability coverage over and above the limits of your homeowner or auto policy (primary policy). The primary policy protects you only to the stated limits of liability on the policy. An umbrella is an affordable way to add liability protection.

Do you need additional coverage? Ask yourself the following questions: Do you own a home? Do you own a secondary residence? Do you own waterfront property? Do you own more than one automobile? Do you own a luxury automobile? Do you own a power or sailboat? Do you own a dog? Do you have an above-average family income? If you answered “yes” to one or more of these questions, you have exposure to lawsuits in the millions. Even if you answer “no” to all the above, but have significant assets, you are vulnerable to financial attack.

Selecting the right size umbrella

How much additional coverage do you need? The answer to that question depends on your financial exposure. Unfortunately, one’s net worth is usually the basis for determining the amount of a lawsuit. Consult with your accountant to determine a reasonable amount.

What other questions should you ask?

  • What assets does the umbrella cover? It should extend to your home, your auto, watercraft, or any other real property.
  • What kind of things does it cover? As an extension of your general liability policy, you want to be certain it includes such things as libel, slander, character defamation, privacy invasion, and false arrest.

For 48 years, we have built our agency to be client-focused. Your needs come first, and we believe in doing the right thing, always. For more information on how to protect yourself, your family, and your assets, contact us.

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