Umbrella Insurance: Not Common EnoughJune 25, 2013
Is your house the Hangout House? Do you ever worry about injuries and the lawsuit risk swirling around us these days? Living a high-risk lifestyle such as having youthful drivers, active kids, and serving alcohol in your home can all increase the risk of lawsuits. Keep your family safe with umbrella insurance.
What is it?
“Umbrella” insurance refers to a policy protecting the insured's assets more broadly than primary coverage. Umbrella insurance protects yourincome, retirement and home equity by providing a safety net of extra coverage. An umbrella policy is pure liability coverage above and beyond your regular policy coverage, sold in increments of $1 million. This may sound like a lot, but later I will offer examples of how these expenses can add up.
How It Works
Umbrella insurance is a safety net or cushion. For example, if the insured has an auto insurance policy with liability limits of $500,000 and a homeowners insurance policy with a limit of $300,000, then adds the $1 million umbrella, the insured's limits become $1.5 million on an auto liability claim and $1.3 million on a homeowners liability claim.
How much does $1 million cost?
Umbrella insurance costs vary, but generally start around a couple hundred dollars for the first $1 million of coverage. Again, this may sound like a lot, but consider reading a medical bill as if you were uninsured—simple procedures cost hundreds of dollars! Unfortunately, we may not realize the reality of how much emergencies and accidents cost until they happen to us. Umbrella insurance is priceless.
Homeowners Insurance Policies
Our kids are also priceless—we love seeing them in their active states, and having the neighborhood kids over is part of the social package. But, if your kids are anything like my clutzy-self, they could trip on landscaping or uneven terrain and sprain their ankle. They could fall out of a tree and break their wrist. They could obtain a concussion during a seemingly harmless game of tackle football.
Auto Insurance Policies
Umbrella insurance also applies to your auto insurance policy.
So, you run a stop sign and T-bone a car that has in it with the following damages:
Accidents are called accidents because you never know what is going to happen, who will be involved and what will be damaged. But, unfortunately, someone has to pay for medical expenses and repairs. If you are at fault, this can happen to you.
Author: Jones Insurance and Associates
June 25, 2013
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