5 Things You Need To Know About Umbrella Insurance
1. Without it, it could ruin you
For example, if you cause a car accident and the other driver sues, your auto insurance covers you up to your personal-liability limit, which is probably between $50,000 and $500,000. Same applies to your homeowners insurance if a guest slips on your steps.
An umbrella liability policy pays for settlements and legal fees above your limit. Without umbrella insurance, your income and assets are at risk.
2. Liability risks are everywhere
“More than 80% of umbrella losses are auto-related,” says Ed Charlebois of Travelers Insurance.
Doing a home remodel? Your general contractor may not vet the subcontractors for workers’ compensation or liability insurance.
Like to have large get-togethers? If a guest gets into a DUI accident, the victim can come after you. Got a pool, hot tub, boat or trampoline? Then you have risk factors.
3. You want to insure against the worst-case scenario
The average awarded for a vehicle accident liability cases is $306,000. That’s why many financial planners say an umbrella policy is a must for those with significant net worth.
4. Get a lot of coverage for not a lot of money
A typical homeowner with two cars can get a $1 million policy for $250 to $400 a year.
If you travel often, a personal umbrella provides international coverage for personal liability. If you are sued for a matter international you are covered as the liability portion of your policy follows you internationally.