What is a Umbrella Insurance?

Umbrella Insurance is a personal liability policy that protects above and beyond the limits on home, car, and other personal insurance policies. It’s an inexpensive way to protect your financial future. Policies for $1,000,000 in coverage typically cost $16 to $25 a month.

You may know of someone or a family who has been involved in a tragic accident that resulted in major, long-lasting injuries or death. I thought I knew what it meant when someone said there are worse things than death, but I did not until I watched someone deal with the turmoil of a major injury with the ongoing financial, emotional, spiritual and physical stress they went through.

In general terms, the Umbrella Policy is $1,000,000 of additional liability insurance that acts as an umbrella over existing coverage. It is in addition to other policies in-force which have to meet specific coverages guidelines, to qualify. Higher limits of up to 5,000,000 are also available. I have counseled many involved in youth activities, scouting or those who have recreational vehicles that they should have Umbrella Policies.

Here are three real-life examples:(names have been changed)

  1. Sarah was meeting friends, but couldn’t remember what time. She sent a quick text to check. With her eyes on her phone instead of the road, she didn’t see the bicyclists in the crosswalk until it was too late. Both cyclists sustained serious injuries requiring hospitalization and rehabilitation. After Sarah’s auto liability limits were exhausted, she was held personally responsible for their medical bills. – Claim:$625,000
  2. The Morgan family was in their front yard when their 81-year-old neighbor, Stewart, came to visit. The family’s gregarious golden retriever ran to greet him. As the man bent down to say hello, the dog jumped up and knocked him over. Stewart fell backward, breaking his arm and hip and hit his head on the sidewalk. He was rushed to the hospital but ultimately succumbed to his injuries. The family’s personal umbrella policy covered medical expenses and ongoing litigation once their underlying home insurance was exhausted. -Claim: $1 M
  3. Zach found leftover 4th of July fireworks in the garage. When his parents were asleep, Zach and his friend snuck outside to give them a try. A bottle rocket zoomed off-course and landed underneath a neighbor’s car, catching it—and their home—on fire. Because of “vicarious parental liability,” Zach’s parents were on the hook for his actions, even though they didn’t know what he was up to. – Claim: $620,000

My wife tells me I worry too much, which is good advice but sometimes stories like these sit in my belly and fester. If you have any concerns please reach out to our agency and see how affordable an Umbrella Policy can be for you.

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