Imagine that you're driving down the road, minding your own business, when out of nowhere you are slapped with a lawsuit.
Why umbrella protection is a necessity in modern times
Lawsuits are a thing, and they are here to stay. People will file suit at the drop of a hat these days. Most people carry and average of $100,000 per person and $300,000 per accident aggregate for other persons you may injure. But note, $100,000 is available per person. Those limits are not sufficient in this day in age for even average losses. People are going out of pocket because they do not carry enough protection. The simple fact is, if you are slapped with a judgement the court will liquidate all of your assets. That means anything you own, even your home if it has equity can be force sold. And if you don't have enough assets to cover the judgement, your future wages are on the table as well. Not having umbrella protection is simply not smart anymore. Umbrella is not a luxury insurance spend it is a necessary one.
The truth is we are not carrying enough protection on our base policies as is. Even having the $300,000 is not enough if you injure people in another car and in your car. $300,000 total is crazy low. The cost of umbrella averages around $20 per month for an additional $1,000,000 in liability coverage. This protects above your auto liability limits and your home liability limits, so if your liability limits on those policies are exhausted it will then look to the $1,000,000 additional you have in the umbrella policy. Yes, you have liability on your home for bodily injury and damages you cause that you are legally liable for. And in most cases the insurance company will represent you taking that cost burden away as well. And in with some carriers you can buy even more that the standard $1,000,000. It's a total look at your assets to find out that sweet spot you need to be in. Take a full look at the value of your home, your cars, boats, everything you own that can be liquidated. That includes retirement accounts and anything of cash value with the exception of life insurance. Once you have that total, you know what you need to protect. If that amount is over your per person bodily injury limit, or your home liability limit, you need umbrella now. Now you know.
Heather Harris
I’m Heather Gibson Harris, owner of Brookson Insurance, which I started in 2009 after a career as a claims adjuster for personal home and commercial insureds. My career has been my passion for many years, especially my time in catastrophe claim work.