Everyone knows that you need Homeowner’s Insurance to cover your home and personal property. And we wouldn’t dream of driving around without car insurance. After all, having vehicle liability insurance is the law.
However, no matter how good your insurance, a catastrophic accident where you are at fault can easily exceed the limits of your policies. Without a Personal Umbrella, you might find your personal assets at risk.
A Personal Umbrella policy covers legal fees involved in a lawsuit and fills in the gap left after a judgement exceeds the limits of the applicable Homeowner’s or Auto policy.
You should consider adding a Personal Umbrella, especially in the following circumstances.
1. You Have Significant Assets (or People Think You Do!). Wealth makes you a target for lawsuits and those are expensive to engage in and could lead to a judgement that attacks your personal wealth, even potentially garnishing your future earnings. Even if you don’t have significant personal assets, the ownership of a business or other activities may make you a greater target because people think you are wealthy.
2. You Have Risky Property. Whether you have a large breed dog or a swimming pool or even just a piece of vacant property, if people encounter significant risk when interacting with your property, you need to have a Personal Umbrella.
3. You Have Risky Hobbies. Hunting and riding around in recreational vehicles are perfectly safe activities until an accident happens and then they can cause significant damage. If you or your family members engage in these activities around other people that might be injured, a Personal Umbrella policy is advisable.
4. You Have a Risky Job. If you are a landlord that interacts with tenants, have clients that come to your home, or host corporate social gatherings in your home, you are at risk for interactions that could lead to lawsuits. A Personal Umbrella may even pay for legal proceedings related to slander or libel that could be brought against someone posting on social media professionally or personally.
5. You Interact with People. OK. That’s a pretty broad statement. But even if you don’t engage in anything more risky than driving across town, you may want a Personal Umbrella to increase the coverage limits beyond what is available on your Auto policy. If you are in a car accident and the damages incurred exceed the limit on your auto liability policy…which is easy to do…having a Personal Umbrella gives you additional protection from a lawsuit from the injured party.
6. You Have Youthful or Inexperienced Drivers in your Household. We can all relate to the excitement of being 16 and getting your license! It’s also no surprise that the first several years on the road we didn’t have the experience and wisdom that only comes with age. If you have young or inexperience drivers on the road, the likelihood of them causing an accident is much greater than that of a seasoned driver. A Personal Umbrella provides that added assurance that even though your kids’ driving abilities are outside of your control, the impact of an unfortunate accident is not!
Whether or not you fit into one of these categories, you may prefer the peace of mind that comes with knowing your personal assets and retirement nest egg are more secure. And a Personal Umbrella is surprisingly affordable to add to your policy, typically between $150 and $300 per year. Of course, this depends on the size of the Umbrella you want to add and other unique factors including your deductible, age, and the specifics on your other liability policies.
If you are considering adding a Personal Umbrella, sit down with your agent and determine the amount and type that works best for you. Protecting your family and your future is the most important reason to be adequately insured. We’re happy to help you do that.