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Aug 28

Umbrella Insurance…why would I need that?

UmbrellaAlthough a good number of people have heard the term Umbrella Insurance, most people don’t really understand what it is or why they might need it.  An Umbrella Liability policy is a stand-alone policy that “umbrellas” over the liability of your other policies by providing a much larger amount of coverage (usually $1 Million or more).

So, why would someone need an Umbrella Liability policy? Well, it depends on a number of things:

  • Assets – The amount of assets you have plays directly into the amount of liability you should carry on your Auto, Home, and all of your other policies. Although your liability shouldn’t necessarily match the value of your assets, in general, the more assets you have, the more liability coverage you should consider. The reason is that your Liability is like a wall of protection that stands between your assets and someone who is suing you to get monies (those assets).
  • Additional Risk Exposure – The less exposure someone has to risk, the less likelihood they will run into a situation where they will be sued. Please note that this does NOT mean they have no risk, as these days, it doesn’t take much at all for someone to claim the world and sue anyone!  That said, there are factors that increase the risk for someone such as a young driver, a dangerous driver, a pool or other “attractive nuisances,” young children (they occasionally create mischief), or other “toys” like boats, ATV’s, etc.  Again, the key here is that the more risk you have, the greater likelihood you could be sued.

There are a number of things to consider when deciding whether or not to have an Umbrella Liability policy, and we’re always happy to walk through you specific situation and provide an honest suggestion (not everyone is in need of an Umbrella Liability policy).

In conclusion, I’ve always liked this phrase (that is so true), as it really illustrates why an Umbrella Liability policy can be very helpful: “You don’t have to be a millionaire to be sued like one.”