You may know that liability insurance is a part of the coverage in your home or auto policy, but do you know whether the basic coverage is enough to cover your assets and protect your financial stability?
Causing an auto accident is a horrible experience in and of itself, but imagine discovering that the person you injured is a world-renowned surgeon or a high-powered CEO. Your auto insurance would cover their injuries, up to your policy’s limits, but what would cover their very substantial lost wages while they recovered?
What is umbrella liability insurance?
Personal umbrella liability insurance, also called excess liability, is an additional layer of protection that supplements your other insurance policies – home, auto, boat, etc. – in the event of a bodily injury or property damage claim or lawsuit that exceeds the plan’s limits.
An umbrella insurance plan provides three major advantages:
- Additional coverage of $1 million or more
- Added coverage for defense costs in the event of a covered lawsuit
- Liability coverage for some lawsuits not covered by your underlying home or auto insurance policies
Each insurance policy you purchase has its limits, and the legal limits vary by state. For example, the minimum auto liability requirements for bodily injury in the state of California are $15,000 per individual and $30,000 per accident. While most people carry policies with more substantial maximums, if you cause a serious auto accident that sends a family of four to the hospital with serious injuries, there is a significant chance your policy will not cover all of their medical expenses. Your umbrella liability coverage would cover the rest.
We live in a litigious society. If your dog were to escape from your yard and bite the neighbor’s child, your neighbors may decide to sue you for more than just medical bills. If you are being sued, it is important to have good legal representation, but that can be quite costly. Your umbrella liability insurance can cover your attorney’s fees and court costs associated with a covered loss.
Liability for Lawsuits Not Covered by Underlying Policies
While your underlying policies – home, auto, boat, etc. – cover many things, there are some potential lawsuits they would not cover. Your umbrella policy provides coverage for many other lawsuits, including slander, libel, wrongful eviction, and false arrest. It may also cover things such as your nonprofit work on a Board of Directors, a boat you rented at the lake, or a car you rented while on vacation in another country.
It Could Happen to Anyone
There are numerous situations where you could find yourself without enough insurance…
Your teenage son injures his best friend while wrestling, causing medical bills that exceed your policy limits.
Your teenage daughter posts fictional and damaging comments on social media about a classmate, and the classmate’s parents bring a lawsuit against your family for libel.
You swerve to avoid hitting a dog in the road, lose control of your vehicle, and drive your car into the cottage on the corner, resulting in more damages than your policy covers.
The repairman slips on a crack in your driveway, and his injuries are so substantial that he cannot work anymore.
Expensive and life-altering accidents can happen to anyone without warning. It’s important to know that your family’s financial security is protected.
How Much Coverage Is Right For You?
Choosing the right amount of coverage depends on your assets and personal situation. At BenefitSource, we specialize in evaluating your individual needs and working within your budget to get you the coverage that is best for you. Call us directly at (877) 215-5431 or email us to set up an appointment to discuss whether you need Umbrella Liability Insurance.
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