When people ask me if they should buy an Umbrella, the answer I’m tempted to give is, “It doesn’t rain that often in Southern California, so don’t bother.” (I know that it’s a tacky joke, but with a set up like that, it’s almost impossible to stop yourself from doing it!) Probably, the first question we should answer is, “What is an Umbrella?”
The Umbrella Liability Policy gets it’s name from the concept that this policy comes down on top of your other policies, and “covers” them (and subsequently, YOU!) Umbrella Insurance is “over-and-above” coverage. An Umbrella policy doesn’t replace your Homeowners or Car Insurance, but it extends them to cover Liability claims in excess of the amount your “underlying” policies cover.
No one PLANS on having a bad accident, and we certainly hope you don’t, but in today’s society, the amount that you could be sued for can easily run into the millions.
If you own a pool, a trampoline or a dog, experts say you absolutely need umbrella insurance. If you own an edgy cat, collect guns, have a child who plays football, or tend to bump into things in the supermarket parking lot, you need umbrella insurance also.
Another benefit of an Umbrella Liability policy is that a good policy can acually provide you coverage for things that you don’t have coverage for elsewhere. If you ever rent a Jet Ski or boat while on vacation, or borrow your neighbor’s scooter for a spin around the neighborhood, then you will benefit from knowing that often your Umbrella Policy can provide coverage for these exposures also.
When an individual decides to sue you after slipping on your sidewalk, being bitten by your shepherd, getting in the way of your 9th hole tee shot, or being sideswiped by your Suburban, their attorney will look for “deep pockets.” Your assets, your earnings, and even your future earnings potential, will be closely scrutinized.
If you own a home in Southern California, a sailboat, a chunk of Google stock, or just hold a Degree, you are well worth going after. The attorney will try to get the lion’s share of the settlement from other players, perhaps the crew who put down the sidewalk or the golf course’s architect, but he still will try to shake a few bucks loose from you. And while these dollars might not mean much in terms of the overall settlement, to you they could mean the loss of your home, your savings and part of a paycheck for years to come.
Umbrella Liability Policies generally are written in increments of $1,000,000. and are surprisingly affordable. Some policies cover legal expenses, and some do not. Ask, and be sure to cover legal expenses if you can; as they can be exorbitant. Every policy has exclusions, read them carefully, because they can put large holes in your safety net. If damage caused by certain breeds of dog is not covered, for instance, and you own that dog, then that policy is not for you.
For about $200 to $300 per year you can buy a $1,000,000 personal Umbrella Liability Policy. The next million will cost about $75, and $50 for every million after that. In the big picture, they are extremely affordable.
Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your Auto Policy and $300,000 of liability insurance on your Homeowners policy before selling you an Umbrella Liability Policy for $1,000,000 of additional coverage.
Feel free to call our agency if you have any questions about what all this means to you, would like to know what it would cost to buy an Umbrella Liability through us, or would like a question answered on any type of insurance.FOLLOW US