What is umbrella insurance?
It is a form of liability insurance for individuals that can save your life or at least help you to save if ever you find yourself responsible for a claim greater than the amount covered by your liability insurance. It means that, if you are sued for a significant amount, your umbrella policy will cover the difference between your auto, homeowner’s or personal property insurance.
If you think that your current insurance is enough, you might be surprised at how much it can cost. You can have peace of mind by investing in a umbrella policy. Your current assets, as well as future earnings, will be fully protected.
Who is eligible for umbrella insurance?
We live in an age of lawsuits and accidents can be costly for anyone. Therefore, it is important to have an umbrella insurance policy.
You only need to purchase one umbrella policy to protect the entire family. Your spouse or children will be protected even if they don’t own auto or home insurance.
10 Reasons to have an umbrella policy
- Your household contains inexperienced drivers
- You have an impressive net worth
- You are concerned about potential income loss
- You own property, especially investment property
- You are a business owner
- You have pets (specifically, large dogs).
- You coach youth sports
- You have children, especially teenagers
- Participate in activities that can easily cause injury to others
- Your items could be the cause of a lawsuit
How Much Umbrella Insurance Do I Need?
Considerations to make when choosing the appropriate amount of coverage
- The value of your assets. A policy that covers your net worth is the minimum you should have.
- Loss of future income: You future income is also at risk if you are involved in a large lawsuit. Consider your future potential income, even if your current income is limited. If you are a medical student you may want to consider your potential future earnings.
Even if the lawsuit is unfounded, a long legal process can be stressful and ruin your reputation. A good umbrella policy will not ease your stress but can help you save what you have worked so hard for.
How Much Does Umbrella Insurance Cost?
According to the Insurance Information Institute, an umbrella policy worth $1 million costs between $150 and $300 per year. The cost of insurance can vary depending on your location and factors like your home’s construction and age, your safety and security features, and your age.
