Do you really need umbrella insurance?

As a general rule, you might hear you should purchase umbrella
insurance if the total value of your assets, including ordinary checking
and savings accounts, retirement and college savings and investment
accounts, and home equity is greater than the limits of your auto or
homeowner’s liability. The idea behind this advice is that you want to
have enough liability insurance to fully cover your assets so you can’t
lose them in a lawsuit.
This recommendation doesn’t quite make sense, though, because jury
awards can easily exceed insurance policy limits.
The real question you should ask yourself is, am I at risk of being
sued?

Everyone is, so in a sense, umbrella insurance makes sense for
everyone.
It’s a small price to pay for the extra peace of mind.
But some people are more likely to need an umbrella policy than others.
If you engage in some activity that puts you at greater risk of incurring
excess liability, you’re an even better candidate for an umbrella policy.
Personal liability risk factors include owning property, renting it out,
employing household staff, having a trampoline or hot tub, hosting large
parties, and being a well-known public figure.
Having a teenage driver in the family also puts you at increased risk, as
does owning a dog or owning a home with a swimming pool.
Basically, the more likely you are to be sued, the more strongly
you should consider purchasing umbrella insurance.

How Does an Umbrella Policy Work?
Here are some examples of incidents an umbrella policy could cover if
your homeowner’s insurance or auto insurance wasn’t enough:

* Your dog runs out of the house and viciously attacks a neighbor who
was going for a walk. Your neighbor sues you to cover her medical bills,
lost wages, and pain and suffering.

* Your daughter gets into a fight at school and punches another girl,
breaking her nose. The girl’s parents sue you.

* You cause a 10-car accident and your auto insurance property
damage coverage isn’t high enough to replace all 10 accident victims’
vehicles. Nor is your personal liability coverage high enough to pay for
their medical bills.

* You send sandwiches to your son’s school for a field trip lunch. Several
students develop food poisoning and their parents sue you.

* Your teenager throws a party at your house while you’re out of town.
Someone brings alcohol to the party, and one of the guests is arrested
for driving under the influence on the way home. You are sued.

As you might have gleaned from these examples, umbrella insurance
covers not just the policyholder, but also other members of their family
or household. So if your teenager isn’t the best driver, you can sleep
better at night knowing your umbrella policy will cover the injured
parties’ medical bills if your kid is found liable for a major accident. That
being said, make sure you understand how your policy defines a
household member so you’ll actually have the coverage you need.

You might have also noticed that, even though umbrella insurance acts
as coverage above and beyond your homeowners and auto insurance,
the incident doesn’t have to involve your property or your vehicle for
your umbrella insurance to cover it.

You’re also covered worldwide, with the exception of homes and cars
you own under other countries’ laws.

You might need a Personal Umbrella Policy if you:

• Own a home
• Own a car
• Want to protect your future earnings
• Want to protect your assets against a lawsuit or judgment

Accidents Happen.

That’s why people have insurance.
However, if you aren’t protected by a personal umbrella policy, you could be
putting your house or your financial assets at risk.

A Smart Way to protect You and Your Family

A personal umbrella policy substantially increases your overall liability
coverage beyond the basic coverage provided under your homeowners
and auto insurance policies. This low-cost policy is designed to protect
you and your family against a catastrophic lawsuit or judgment.

You’ll find a personal umbrella policy is a good idea.

• $1 million to $5 million in additional insurance
• Backed by a financially secure, A+ rated company
• You can keep your current homeowner/auto insurer

Real Life Tragedies

• In Louisiana, an insured’s teenage son was driving his younger sister
  and her friend to the movies. He lost control of the vehicle, left the
  road and hit a telephone pole. The friend permanently lost the use of
  her right arm and suffered severe brain injuries resulting in permanent
  brain damage. The claim was settled for $1,350,000.
• A vacationing family hired an individual to house-sit their home, giving
  permission to have guests and use their pool. A guest, while holding a
  toy belonging to the family dog, dove into the pool. The dog jumped in,
  knocked him off his dive, causing him to strike his head on the side of
  the pool. The 39 year old is now a quadriplegic.
  The insurance company ultimately paid the policy limit of $2 million.
• An insured’s son was at a friend’s home with teens who went outside
  to shoot paintballs at trees. When they began shooting at each other,
  one ran into the house to avoid being hit. He passed the claimant
  who, when opening the door, was struck in the eye with a paintball
  fired by the son of the insured. The claimant suffered severe blunt
  trauma to his eye and, as a result, is legally blind due to his 20/200
  vision in his other eye. The case settled for $1.2 million.