Maybe you rely on your home and auto insurance to protect you against lawsuits. While these types of coverage set a strong foundation for protecting yourself against litigation, they offer limited protection and come up short of covering everything. In fact, even top-of-the-line home and auto insurance policies might leave gaps in your coverage that leave you financially vulnerable to risks. Umbrella insurance is your safety net against damages that exceed or exist outside the realm of coverage on your primary insurance policies. Continue reading to learn more about umbrella insurance and why it could become one of your most valuable asset protection tools
How an Umbrella Shields Your Wealth
Umbrella insurance is an extra layer of protection standing between your assets and the lawsuits that may threaten them. It is supplemental, high-value insurance that is secondary to your primary insurance policies. Once the limits on your home, auto, or boat liability have been reached, umbrella insurance kicks in, picking up the bill for remaining damages and legal expenses for an additional $1 million or more.
For example, imagine a driver who injures four victims in a car accident. The damages result in a $1.5 million judgment, for which the driver’s auto insurance only pays $500,000. The remaining $1 million is on the shoulders of the driver. With an umbrella policy, the damages are fully covered between the two policies. Without it, the driver might lose savings, investments, and future income to satisfy the judgment.
If you have accumulated a lot of assets or have experienced a windfall, it might be obvious that lawsuits can target ‘deep-pocketed’ individuals. However, keep in mind that you do not have to be wealthy to be sued. Once insurance has paid, a victim could pursue your assets. If you have no assets, a court could order garnishment of your future wages and inheritance.
Umbrella Insurance vs. Excess Liability
Though often used interchangeably, ‘umbrella insurance’ and ‘excess liability’ are two very different things. Having excess liability simply means that you have extended limits on the coverage within your existing policies. The coverage is restricted to the terms in your home, auto, boat, or other liability coverage. A true umbrella, however, will not only extend coverage limits on your existing policies, but may also fill in gaps not covered by other policies, such as slander, libel, false arrest, and damages you cause when traveling abroad. That is why we recommend only working with an independent agent here at Couri Insurance so that you are informed and capable of making an educated decision about your coverage.
Get an Umbrella Insurance Quote
If you are ready to take the next step in protecting your financial future, contact an agent here at Couri Insurance. We can help assess your current risk exposure and recommend coverage based on your individual needs. Since umbrella insurance is supplementary, you might also need to raise the coverage limits on your home and auto liability to meet the requirements of your umbrella policy. These may include:
- $300,000 or $500,000 homeowners liability
- $250,000/$500,000 auto bodily injury liability OR
- $300,000 combined single limit (CSL)
In most cases, a $1 million policy can be purchased for as little as $200 per year, but additional coverage is available for those who need it. Regardless of your coverage limits, you can trust that we will work hard to acquire the greatest savings on your home, auto, and umbrella coverage. For more information about umbrella insurance or to request your free quotes, contact our office today.
Is umbrella insurance a part of your asset protection and wealth management plan?