Five Reasons to Have Umbrella Insurance

May 23, 2018

You know what an umbrella is, but do you know about umbrella insurance policies? Just as an umbrella can keep you dry even when it’s pouring rain outside, an umbrella insurance policy can protect you when an expensive claim or lawsuit threatens your financial security.

Umbrella insurance provides extra liability coverage on top of your regular policies. It’s a personal policy that kicks in when your other policies – like home and auto – are maxed out.  Below are five reasons to consider umbrella insurance:

1. Claims can be expensive.

If you don’t have enough insurance, you’re taking on a lot of risk. Look at your auto insurance policy as an example. Each state establishes minimum liability requirements. In California, drivers need coverage for at least $15,000 for injury or death to one person, $30,000 for injury or death to two or more people, and $5,000 for property damage. 

Someone who carries the minimum coverage may find it’s not enough. After all, damage to a single car or building can easily cost much more than $5,000. Medical treatment for one person’s injuries could go way beyond $15,000, especially if the injuries are long term or if surgery is required.

It’s clear that the minimum might not be adequate, especially for an individual with significant assets to protect. You can up your limits – but how high should you go? Even a high limit of $250,000 might not be enough in all situations.

An umbrella policy makes it easy to obtain extra coverage, not just for your auto insurance, but for multiple personal liability insurance policies at once.

2. You could be sued. 

Umbrella insurance also protects you against expensive lawsuits. If someone is injured on your property or if your dog bites a neighbor, the following lawsuit could be very expensive. A dog bite led to a $1.75 million settlement in New Jersey in 2017, according to NJ.com.

Umbrella insurance can also provide coverage for other types of lawsuits, such as slander and libel.

3. You don’t want to lose everything.

Insurance is all about risk management. You know that accidents and lawsuits happen, and you want to be protected from the financial fallout.

But if a claim or lawsuit is for more than the limit on your insurance policy, you could end up paying the rest out of pocket. Therefore, it’s important to carry enough insurance to protect your assets. Umbrella insurance provides a simple way of doing this.

4. It’s affordable.

Umbrella insurance provides a lot of coverage, but this doesn’t mean it’s expensive. The premiums are surprisingly affordable.

According to the Insurance Information Institute, you can get $1,000,000 in coverage for as little as $150 to $300 per year. Higher limits come at an even better deal.

5. You have better things to do than worry.

You have enough things to worry about. Don’t add insurance concerns to the list of things keeping you up at night. With the right umbrella insurance policy, you can rest assured that you’ll be protected. Talk to your Heffernan Insurance agent to learn more.