No one expects a lawsuit when they roll out the welcome mat to their home or business. We all wish to enjoy the company of our customers, family, and friends.
And, we work hard to keep our properties safe and sound for them. But, not everything is within our control. Mother nature can add some pretty daunting obstacles like snow and ice.
And, innocent people can lurk around when we’re not there. Fences, sidewalks, or machinery can become weapons in the wrong hands.
Though we have coverage for car accidents, the cost to cover multiple injuries can exceed your insurance policy’s limits. And, victims may need medical support for months or years.
Slip and fall accidents are the number one lawsuit against homeowners and businesses. Though we can not always prevent every risk in our lives, we can prepare for them.
We are here to tell you more on how an umbrella policy can be your protection if the worst happens.
Who Should Consider an Umbrella Policy?
Though they are very affordable, not everyone needs an umbrella policy. If you do not own a business or home, you may not need the coverage.
But, there are some pretty standard qualifiers for those who should consider one.
If You Have Sizeable Assets
If you have property, retirement accounts, and savings, experts would tell you they can be at risk. Even though we tend to think of them as our safety net.
What if you are in a car accident that results in injury to others? Or, someone slips and falls at your home or business?
You are right that your current policies will pay for medical costs. But, they have limits. If someone sues because the coverage runs out, you are responsible for it. That’s not a good situation to be in.
If they win the suit, your assets may have to write the check.
If You Need Higher Limits…
Those who have business coverage should revisit their holdings often. As we grow our future, we have more risk, too.
An umbrella policy begins at $1 million in coverage. The increments from there of $1 million each cost less in premiums than the initial amount.
This is one of the few policies where holder pay less as the coverage goes up. Experts suggest having more coverage than you need.
Protect Future Income
If the unfortunate happens and there is a lawsuit against you, it is not only your current assets at risk. It can include your future income, too. A judgment will follow the defendant until the debt is gone.
For business owners and professionals, this can be devastating for their family, also.
The Risk From Those Around You
When you consider the risks around you, it may be impossible to weigh all the consequences. The more you drive, the more chance there is of an accident.
If you own land, rental property, or a business, you have exposure. If your company supplies goods or services, there is a risk to employees and customers.
And, if you use a boat, ski, or other risky sport, the possibility of bodily injury goes up.
Is My Current Coverage Enough?
Umbrella policies are only available along with an existing business or home policies. The idea of having the coverage is to supplement what you already have.
For example, if your homeowner’s liability is $300,000 but a judgment against you is $700,000. You are responsible for $400,000 on your own.
This amount does not include attorney fees or court costs. Though many consider themselves “covered”, it’s important to know your coverage limits.
What Does an Umbrella Policy Cover?
Depending upon coverage and your needs, an umbrella policy can cover the following:
- Damages for liability
- Property damage you cause
- Bodily injuries on your property
- Injuries from car accidents exceeding your coverage
- Damages to others doing business with you
- Attorney’s Fees
- Third party risks such as rental properties
- Representation for lawsuits such as defamation or libel
- Coverage for intangible professions like finance or therapy
We should note when a plaintiff sues, they are claiming things like pain and suffering. They can only collect for such things through a lawsuit.
These are not coverages in a typical policy, so an umbrella policy is necessary. Otherwise, a defendant must pay out of their pocket.
What Does an Umbrella Policy Cost?
Umbrella policies are very affordable. They range from $200 per year up to $1,000 per year. Here are a few things which can affect rates:
- Net Worth
- Credit History
- Driving Records
- Ages of those driving
- Risks such as swimming pool, boats, snowmobiles, or RV’s
As a general rule, a $380 per year premium will cover a typical home and two drivers at $1 million. An extra $100 per year will provide coverage at $2 million.
The $1,000 per year premium is for those looking for $10 million in coverage. As you can see, the benefit far outweighs the cost.
But, we find many with considerable assets do not opt for umbrella coverage. Estimates are that 1 in 5 people with enough wealth and risk do not prepare.
What’s the Best Umbrella Policy?
The best umbrella policy is the one which best fits your needs, property, and lifestyle. The expense of losing any one of these can be devastating to you and your family.
Our independent office can shop for the best coverage for your needs. We will find something you can depend on and afford.
From ATV’s to renter’s insurance, we can find the best coverage for you. Click here for a quote.