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You might think that if you have homeowners and auto insurance, you have enough insurance coverage in place to protect you financially if you’re responsible for an accident of some kind. Unfortunately, that isn’t always true. If you are sued because of an accident (car, trip and fall on your property, etc.), you may find your coverage isn’t adequate and you’re on the hook for a devastating payout.

That’s why purchasing an umbrella policy can be a smart move for many people.

What is an umbrella policy?

An umbrella policy is excess liability coverage that will protect you financially if you’re sued because of injury or property damage for which you’re responsible. This coverage is over and above what you carry through your personal auto or homeowners insurance. For example, say you’re in an auto accident and you’re deemed responsible in a lawsuit. The judgment is 900,000 and your insurance policy only pays up to 300,000 per accident—you ’re responsible for the remaining $600,000.

You can buy an umbrella policy in increments of $1 million dollars, and your goal is to purchase enough coverage to protect your net worth. Your L & M Insurance Group agent can help you determine how much coverage you need.

Who needs an umbrella policy?

If one or more of the following examples applies to you, you should consider purchasing an umbrella policy:

1. You have a swimming pool, trampoline, or play equipment in your yard. These “attractive nuisances” can be great fun for you and your family, but can pose accidental danger for house guests, visitors, even neighborhood kids who sneak onto your property without your permission. If someone is injured using one of these, your homeowners insurance liability limits may not be high enough to cover damages from a resulting lawsuit. In addition, some homeowners policies don’t cover these items at all.

2. You have assets that could be lost in a lawsuit. Assets such as savings, investment properties, second homes, and non-retirement investment accounts can be at risk if someone sues you.  And even if you don’t have much now, a lawsuit can wipe out not just your current assets, but also your future earnings if your wages are garnished.

3. You own a dog. Sad but true, man’s best friend can also cause you financial problems. If your dog bites someone or knocks them down and injures them, you could be at risk for a lawsuit. (Click here to learn more about dog bite liability coverage.)

4. You spend a lot of time on the road. If you drive a lot, especially during rush hour, you have a higher chance of being in an accident.

5. You entertain frequently. Again, with more people visiting your home, your exposure to a possible lawsuit if someone is injured on your property is higher.

An umbrella policy can be a great choice for financial peace of mind, and most policies cost only a few hundred dollars per year.  If you’d like to know more about umbrella policies, or any other insurance products, L & M Insurance Group would love to help. We’re an independent Florida insurance agency located in the Tampa Bay area, serving Tampa, Brandon, Riverview, Valrico, and surrounding communities.  Call us at 813-672-4100 to learn more, or if you prefer, reach us via email by clicking here.

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