If you own, rent, or lease a home or auto, you likely have liability insurance to protect yourself from accidents, whether a slip and fall on your property or an auto collision. However, these policies typically have coverage limits, and in the case of a significant incident where you’re found at fault, those limits may fall short. When claims exceed the coverage of your standard policies, your personal assets could be at risk. This is where an umbrella insurance policy comes in.
An umbrella policy offers additional liability coverage beyond the limits of your basic insurance. Without it, you may face the threat of having your assets claimed or your income liened to satisfy a lawsuit. In today’s legal climate, with attorneys advertising aggressively on billboards, social media, and the airwaves, the risk of being sued is ever-present. That’s why it’s crucial to ensure that you’re adequately protected.
To determine how much coverage you need, consult with your property and casualty agent. They can help you assess your potential risk exposure and help you decide on the appropriate amount of coverage. Generally, purchasing as much umbrella coverage as you can reasonably afford is wise. For example, a $3 million policy costs around $1,200 annually. Umbrella policies usually start at $1 million and increase in million-dollar increments, with premiums determined by factors such as the number of vehicles you own, the nature of your assets, and whether you have any higher-risk items like a pool, boat, trampoline, or an aggressive dog breed. You may qualify for discounts by bundling your policies.
As Ken Burns of Burns Insurance Group in Ansonia explains: “In today’s litigious environment, where many accident payouts exceed $150,000, basic auto coverage often falls short. For example, if your child rear-ends a car carrying four people, and each person sues for $200,000, you could be facing an $800,000 claim. If your auto policy only covers up to $500,000, you’re still on the hook for $300,000, which could lead to your property or paychecks being liened. An umbrella policy protects you from this kind of financial exposure.”
By purchasing an umbrella policy, you are adding an extra layer of protection to safeguard your assets. In an unpredictable world, it’s a small investment for peace of mind and security.