After a long day at the office, Sally is finally on her way home. Deciding she is not going to go home and cook dinner, she reaches for her cell phone to call in a takeout order. She takes a moment to look at her phone to find the number, just a few seconds, but that was all it took to miss that the car in front of her had turned on its turn signal and slowed down. Sally rear ends the car in front of her. This accident resulted in serious injuries, which turned into a lawsuit and court dates.
Sally was found at fault and ordered to pay $1,000,000 for medical expenses, lost wages and the “pain and suffering” of the injured parties. Although she had auto insurance, the policy had a limit of $300,000. That leaves Sally to make up the additional $700,000. Fortunately Sally didn’t have to drain her assets because she has personal umbrella insurance.
What is umbrella insurance?
It is a policy that will extend the limits of your auto and homeowners insurance policies. It will also provide coverage for personal injury claims. Like an umbrella that protects you from the rain, a personal umbrella insurance policy provides an extra layer of insurance coverage over your standard liability policies. It protects your personal assets by kicking in when your standard liability coverage is exhausted. Even if your assets are small, it can protect your income; in some settlements, wages can be garnished up to 10 years. In Short: an umbrella insurance policy protects you from a downpour – that worse-case scenario where you could lose everything in a lawsuit.
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Who needs a umbrella insurance?
You do! contrary to popular believe, umbrella insurance is not just for the wealthy. We recommend that everyone consider carrying an umbrella insurance policy. If you have a teenage driver, own a swimming pool or entertain at your home frequently, you could have increased chances of getting sued. It is wise to supplement your insurance with umbrella insurance.
How much do I need?
That is something you should discuss with your agent to ensure you have enough coverage. You’ll want to take into consideration not only your total personal assets but your potential personal risks. Coverage starts at $1 million, and can go as high as $10 million.
How much does coverage cost?
Compared to the coverage you gain, additional liability insurance is fairly inexpensive. Depending on the policy value and your personal risk factors, such as recent auto tickets, your credit rating and more, a $1 million umbrella insurance policy typically costs about a dollar per day. Cost goes up an additional $50 to $75 for each million thereafter.
Don’t put your savings and assets at risk. Count on our expertise and let us design an insurance plan to fit your needs.
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