A personal umbrella insurance policy is an often overlooked, but very important component in complete insurance protection. Umbrella insurance is designed to give you extra liability insurance over and above your other policies in order to protect you against a major lawsuit that could cause you to lose your savings and assets.
Many people think that they don't have enough assets to consider an umbrella but that couldn't be further from the truth. If you are on the losing end of a major lawsuit, you could lose your home, retirement savings, vehicles, future wages and pretty much anything of value that you own. In addition, your umbrella policy will pay the legal cost involved with defending yourself in a lawsuit. At Morris Insurance Services, we advise anyone who owns a home, has savings, has young drivers in the household, or owns rental properties to consider an umbrella policy. In addition, if you own toys such as a motorcycle, RV, boat, or ATV, you can include these items on your umbrella policy.
So what exactly in umbrella insurance? The term umbrella comes from the fact that the policy "covers" all that is important to you like an actual umbrella would in the rain. The idea is that you insure your families liability on your automobile, homeowners, boat policies etc. and the umbrella provides a lower cost extra layer of liability coverage over top of those policies in case the underlying coverage is not enough.
Suppose you are found to be at fault for an automobile accident involving multiple vehicles where it is determined that you are responsible for $850,000 in damages for both property and injuries, but your auto insurance policy only covers up to $500,000. In this case, your auto policy would pay the $500,000 and your umbrella policy would pay the additional $350,000. Without the umbrella you would be expected to pay that $350,000 out of your own pocket.
No one wants to be sued for something that their teenage child does, but we all know that they are often not the best drivers and don't always use the best judgement. Lets say you are out of town and your teenager decides to throw a party and allows guests to bring alcohol. If one of those guests drives under the influence and has a serious accident on the way home, you could be on the hook and sued even though you weren't even home! In this case, your homeowners insurance would pay first and when that coverage is exceeded your umbrella policy you take over and pay your legal costs and any judgment against you.
In recent years, with social media usage, getting sued for libel is becoming more and more prevalent. Once though to be a remote possibility, a lawsuit over something you or your child posts on social media could end up costing you dearly. I recently read about a lawsuit that occurred when a customer of a restaurant posted a negative review on a social site and the restaurant fought back and took them to court. It turns out that while the customer had been to the restaurant, they went a little overboard with their anger and stated a lot of things in their review that were proven to be untrue in court. The restaurant owner claimed that irreparable harm had been done to their business and was awarded a seven figure settlement. I don't know if the angry review writer had an umbrella insurance policy, but if they had it would have covered them in this situation.
Clearly, with the examples I have given, the answer do the question "who needs an umbrella policy" is most often everyone. At Morris Insurance Services we completely understand that our customers are already paying a lot for insurance coverage so we know the budgetary concerns involved with adding another policy, but we encourage you to give us a call and get a rate to see if its something that would work for you. Prices for umbrella policies are relatively inexpensive compared to other policies and it really depend on how much you need to cover. The typical two cars and a home family won't pay much. If you have 5 cars, 3 teenagers, and 3 homes, it could get pricey, but you are the family that needs an umbrella the most.
Give us a call at 410-857-4550 and we will go over all over your options.
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