Why You Should Have Personal Umbrella Insurance
Have you ever heard of umbrella insurance and thought, “what exactly does that mean?”
Well, picture this: you accidentally cause an accident and hit another vehicle. The car you hit suffers significant damage, and the two passengers are seriously injured. It will cost $25,000 to repair their car and $275,000 to treat the passengers’ injuries. Also, the driver of the car you hit will have to miss at least a month of work due to the injuries, so he sues you and is awarded $200,000. Total everything up, and you’re looking at $500,000.
You have $300,000 in liability coverage, but the other $200,000 will have to come out of your pocket.
This is where personal umbrella insurance can come into play. An umbrella policy provides additional liability coverage beyond the limits of your standard insurance coverages. Umbrella coverage can act as a financial safety net, providing peace of mind you may not have realized you needed.
What does Personal Umbrella Insurance cover?
Personal umbrella insurance offers liability coverage for bodily injury, property damage, and costs associated with lawsuits, such as legal fees and investigative expenses. It’s designed to safeguard your financial assets from significant, unexpected liability claims and legal actions.
If you’re involved in a lawsuit because of an accident you caused, umbrella insurance can help cover costs after your standard liability limits are maxed out. Depending on your policy type, your coverage may also provide reimbursement for lost wages incurred while participating in defense proceedings, like court appearances or depositions, up to the policy limits.
What’s not covered by Personal Umbrella Insurance?
Umbrella insurance does not cover your own injuries or damages to your property. It does not cover incidents that you cause on purpose—only situations that are caused on accident.
Why do you need a Personal Umbrella policy?
While a personal umbrella policy can benefit anyone exposed to liability risks, there are certain groups of individuals who may find the coverage especially important. If you’re a homeowner, have substantial assets or a high net worth, or have a teenage driver in your household, personal umbrella insurance is worth considering. This coverage not only provides supplemental protection to your standard insurance policies but also offers peace of mind by protecting you from unexpected incidents that could have a major financial impact.
How much Umbrella Insurance do you need?
Determining how much coverage you need depends on your financial situation, lifestyle, and potential liability risks. Start by evaluating your assets and their worth; your umbrella coverage should be sufficient enough to protect the total value of your assets after your standard insurance is applied. Consider activities that might elevate your liability risk such as owning multiple properties or rental homes, having a swimming pool or trampoline, or frequently hosting guests. The greater your exposure to risk, the more coverage you may need. It’s always wise to discuss coverage amounts with your insurance agent before choosing the right amount of protection.
Life is unpredictable, but your financial security doesn’t have to be. For more information on personal umbrella coverage, reach out to your local Alfa® agent.
All coverages are subject to deductibles and policy limits. This is not an insurance policy. It is intended only to provide a general description of Alfa Insurance® and/or its product lines and services. An actual policy contains the specific details of the deductibles, coverages, conditions and exclusions. Your Alfa® agent can explain the policy and benefits and answer any questions you may have before you buy.