It only takes a moment for an accident to happen and for your life to change. In today’s litigious world, if you’re responsible for an accident, you could find yourself being sued and your auto or homeowners policy limits aren’t sufficient to meet the damages. For that reason, we recommend that you carry an umbrella policy.
An umbrella policy is excess liability coverage over and above your other insurance, such as your auto or homeowners policies. Umbrella policies will protect your assets—including your home, retirement accounts, savings, investments, and your future earnings—from being taken in a lawsuit. Policies start at $1 million dollars of liability coverage and climb in $1 million dollar increments from there. The goal is to have enough coverage to protect your net worth. (You’ll want to discuss the amount of coverage you need with your L & M Insurance Group agent.)
Protecting your assets
Here’s how an umbrella policy works: Let’s say you were judged to be liable in an auto accident, and your auto insurance carries a liability limit of $300,000. Unfortunately, the judgment against you comes down at one million dollars. If you have an umbrella policy, it should pay the remaining $700,000. If you don’t have one, any savings or assets you have will be at risk, you could have a lien placed on your home, or your wages garnished to make up the difference.
There are many scenarios in which you could find yourself needing an umbrella policy. What if a passenger in your car is injured, you hit a cyclist, or someone trips and falls on your property and is hurt? Do you have teenagers in your household? Do you have a swimming pool, or a trampoline? These items are responsible for many insurance claims. Owning rental property also raises your liability exposure.
Can you afford an umbrella policy?
The good news is that umbrella policies are affordable, with most running just a few hundred dollars a year—a small price to pay when you consider your peace of mind.
Without an umbrella policy, your assets are vulnerable. Accidents do happen, and it makes good financial sense to protect yourself with an umbrella policy. Please contact L & M Insurance Group today, and let us help you find the policy that is right for you.