A multi-car pileup is traced back to your vehicle. An ill-timed social media comment sparks a viral defamation backlash. Your teenager has a party that ends in a bonfire, fireworks, and injuries to several guests. Any of these situations can land you on the hook for a major lawsuit. Innocent or not, you are playing defense in court.
Your existing insurance assists with legal fees, but the price you pay to defend yourself can quickly exhaust a typical home insurance policy. When your policy limits are exhausted, you may find yourself in dire straits. Adding an umbrella policy can be even smarter, helping to keep you protected against these unforeseen circumstances.
Umbrella coverage isn’t just for the “rich or risky”
You might think obtaining umbrella coverage is not necessary because you are not rich, or that an extra million dollars in coverage is overkill. You’d be wrong.
Let’s say you lose a personal injury lawsuit claim. The compensation amount might be left for a jury to decide. If that jury is asked to account for pain and suffering, future lost earnings, or loss of quality of life, you might be hit with a huge settlement. The court will find a way for you to pay, even if you think you can’t afford it.
What you currently have in your checking account is irrelevant, because you also have assets: your home, your kids’ college savings, your retirement, your current income, and your future income. It’s all on the line and fair game when calculating net worth in a lawsuit.
Who needs an umbrella?
Almost everyone is at risk of being sued, especially if you or your spouse:
- Own your home
- Host parties (holidays, sleepovers, sports, etc.)
- Have teen drivers
- Coach youth sports
- Lead or host youth groups
- Have a swimming pool or hot tub
- Have a trampoline
- Own “toys” like snowmobiles, boats, jet skis, golf carts or all-terrain vehicles
- Own rental properties
- Own pets (especially dogs) Carpool or frequently drive
- Babysit or host homeschool pods
- Are a high net-worth individual
- Are active on social media
- Do gig-work
Benefits of an umbrella
An umbrella can be a nice buffer to your risk management playbook. An umbrella:
- Extends the coverage across your existing policies
- May be cheaper than raising limits on individual policies
- Can broaden your coverage once the umbrella kicks in (less restrictive language)
- Has coverage options from $1 million to $10 million
- May offer over $10 million in coverage (when underwritten by specialty insurance companies)
- Extends coverage on defamation and other clauses named in your policies
- Helps with legal fees and judgment costs
- Allows insurance companies to negotiate a settlement
Unfortunately, lawsuits happen; they also happen to be expensive. Thankfully, plenty of asset protection is possible when you put an umbrella over your policies. Easy.
Deploy an umbrella over your personal assets
Now that you are aware of the potential for expanded coverage, savings, and service, give the Clyde Paul Agency a call to see what is available. You might be surprised at how inexpensive it is to double (or even triple) your limits. Please note that different risks can impact your premium—there are surcharges for youthful drivers, pools, etc.
An umbrella only covers what is already there in your policies. If something is excluded in your home or auto policy, it will likely be excluded in the umbrella.
Contact us for a review of your risk
Email us at info@clydepaul.com or give us a call at (201) 991-7598 to find out what’s covered on your current home and auto policies. We’re happy to discuss in detail how obtaining an umbrella policy can broaden coverage and protect what’s most important to you!