02 Dec The Importance of Umbrella Insurance

Understandably, umbrella insurance is something a lot of people misunderstand. If you have auto insurance and homeowners insurance, you don’t need an umbrella insurance policy, right?

Wrong!

Sometimes an accident can be so bad that it will quickly overcome the liability limits of your standard insurance policies and leave you in the dark.

Umbrella insurance gives you an additional layer of protection that goes above what normal homeowners and auto insurance offers. It gives more coverage, pays for legal defense, and can help you in extreme situations. In many cases, umbrella insurance can be a real financial life saver.

So, how do you know if you need an umbrella insurance policy to protect your assets? Keep reading.

Why Is Umbrella Insurance Important?

Umbrella insurance is vitally important for most people who don’t have hundreds of thousands of dollars to spend in case of an accident. Let’s think about an example:

Say you have $250,000 of liability insurance coverage with your auto insurance. You kept your monthly rates low instead of paying more per month. However, you are in a very bad car accident, and it is your fault because you were texting your spouse that you were going to be late. Your car insurance will pay out the $250,000, but you still owe $1 million in damages to the other parties involved. Your umbrella insurance will be able to help cover the accident.

To determine whether or not umbrella insurance is important to you, think about your life. Do you have $1 million in the bank to payout? Then, think about everything that you own: your car, house, checking account, savings account, and any other “big ticket” items. These items could be at risk if you can’t cover them.

If you are in an accident or you are involved in a bigger lawsuit, you could be responsible for a large amount of money. If you don’t have the insurance to cover those damages, you could be destroying your life and creating significant financial hardship for years. An umbrella policy can help to prevent that or at least make things more manageable.

Is There Anything Else You Can Do?

Another option you have is to increase the liability limits on your existing homeowners or auto insurance. However, it may not be enough to protect against everything. You will have more coverage upfront, but you won’t have coverage for extreme situations, court proceedings, or lawsuits.

If you have physical items you’d like to protect, umbrella insurance is truly the best way to go. It picks up where all other policies leave off and is more effective than what most people do, which is simply cross their fingers and hope that nothing goes wrong.

Reasons Why You Should Get an Umbrella Policy

If you are thinking about getting an umbrella policy, this is a sign that it is something you should do. There are many reasons why you should get one, but here are some of the most common ones:

1. You get better protection if you are involved in an accident or something happens at your home.
2. You are protecting all of your assets, including your car, house, investments, retirement, checking, savings, and more.
3. You will have peace of mind when you go out into the world.
4. If you get involved in a legal battle, your fees may be covered.
5. If you are volunteering for an organization, such as Habitat for Humanity for example, and you get hurt, your umbrella coverage may cover you.

These are just a few of the reasons why an umbrella insurance policy might be a great option for you. Thinking about signing up for umbrella coverage? Talk to our team today. After all, protecting yourself and your assets gives you the peace of mind you deserve!