Few things are more frustrating than spoiled plans. Without the right insurance protection, however, it only takes one major lawsuit to derail all or part of your financial plans for the future. You work hard to provide yourself and your family with the lifestyle you want and deserve. Whether you are saving for a child’s college education, stashing away money for a down-payment on your dream home, or saving extra cash for retirement, the income and assets that bring you security now could all disappear in the blink of an eye if you are sued with inadequate liability protection. Umbrella insurance can give you the protection you need to withstand expensive litigation and continue with your plans for the future with little or no financial strain.
What is Umbrella Insurance?
An umbrella policy is separate from your other insurance coverages, but it works in conjunction with them to extend your liability protection should you ever exhaust the limits of your primary coverage. Think of it as supplemental protection in case you run out of liability insurance protection on your car insurance after causing a collision or your homeowner’s insurance after someone is gravely injured on your property.
A typical umbrella insurance policy comes with very high limits – usually at least $1 million or more. Once you reach the limits of your auto, home, or other primary liability coverage, umbrella insurance can help cover the remaining financial responsibility up to the limits of your policy. In some cases, umbrella insurance may even cover liabilities that are not covered by your other insurance policies, such as:
- Incidents while traveling abroad
- Libel, slander, and defamation accusations
- Damages caused while renting a boat
- And more
How Umbrella Insurance Works
There are endless scenarios in which an umbrella insurance policy could prove beneficial. For example:
Your teenage daughter is babysitting a young child in your neighborhood. While making lunch, she goes to answer the phone, leaving the young child in the kitchen alone. She returns to find the child has scalded her hand and arm on a hot stove, causing permanent nerve damage, scarring, and requiring multiple surgeries. The child’s parents sue your family for medical bills and traumatic injuries – a total of $2.25 million. Your homeowner’s liability insurance covers the incident for up to $250,000, leaving $2 million in damages. Fortunately, you had purchased a $2 million umbrella insurance policy, which covers the remaining damages and safeguards your family against financial ruin.
If you had faced the same situation without umbrella insurance, the financial outcome might have been much more grim. With a $2 million judgment to pay out of your own pocket, you might have been forced to liquidate financial assets, modify your plans for the future, and make years of payments from your future income to help satisfy the debt.
Of course, this is only one example out of many that could lead to a six or seven-figure settlement or judgment against you or a member of your household. Even the highest auto and homeowners liability limits may not be enough to protect you against the damaging effects of an expensive lawsuit.
What Umbrella Insurance Covers
Umbrella insurance offers broad protection for many different types of liabilities. Although it does not pay for your own personal losses or injuries, it does typically cover third-party injuries, property damages, and even funeral expenses. It can also help cover your legal fees and court costs related to your defense. Things that are excluded typically include willful or intentional acts that result in third-party injury or loss, as well as certain other events that may be outlined in your policy. We here at Giuffre Insurance can help you better understand the protection within your umbrella policy and answer any questions you may have about what is covered.
Umbrella Insurance is Not Just for the Wealthy
It is a common misconception that umbrella insurance is a product primarily recommended to wealthy individuals. While people with extensive assets certainly benefit from high-limit liability protection, middle-income families are often surprised to learn just how much they have to lose to a potential lawsuit, too. That is because it’s not just about the assets you have now, but also about the income and savings you plan to accumulate for the future.
You may need umbrella insurance if you:
- Are young with many working years ahead of you
- Own investment properties, such as a rental home
- Have significant investments, savings, or other financial assets
- Are saving for retirement or a child’s college education
- Stand to receive money from a trust or other inheritance
- Own a dog
- Have high-risk belongings, such as a pool or trampoline
- Travel abroad
- And more
Selecting Your Coverage
Umbrella insurance is for everyone – not just the wealthy. Why take a chance with your family’s future when high-limit supplemental coverage is so easy and affordable to obtain? Here at Giuffre Insurance, we can help you shop and compare umbrella insurance from multiple leading Wisconsin insurers to find competitive rates on the coverage you need. Most policies offer a minimum of $1 million in additional liability protection, although you can add additional coverage in increments of $1 million. Premiums are typically just $150-300 per year, with each additional million in coverage being more affordable than the first.
Note that insurers may require you to meet certain coverage requirements on your primary liability coverages before extending an umbrella policy to you. If your current limits do not meet the standards needed, we can help you acquire the additional coverage you need to be eligible for umbrella protection.
For more information about umbrella insurance and how an independent agent can help you save on the coverage you need, contact our office today. We look forward to serving you soon.