What is Umbrella Insurance?
Ashley could see the flames and hear the sirens. What just happened?
Frantically, she checked the back seat where her 17-month old son Jayden was
nestled in his car seat. A huge relief swept over her when she saw he was scared, but okay.
She quickly leapt from the car, snatched Jayden from his car seat and bolted away from the fire just feet in front of her car.
A minute ago, she was happily driving down the road. Suddenly, the car in front of her swerved and she saw the stopped truck just a few feet ahead. Instinctively,
Ashley jerked the wheel to the right to avoid the truck.
Her car hopped the curb, smashing into the side of a coffee shop – and the shop’s propane tank, setting off a dangerous fire.
The coffee shop was a total loss, but thankfully there were no serious injuries.
Safely back at home, Ashley called her insurance agent who assured her the
insurance company would pay for her car.
But he also had some bad news.
The damage to the coffee shop was estimated to be as much as half a million dollars but her auto policy only had $100,000 of liability coverage. It was likely the coffee shop would sue her for the rest of the money.
Ashley was stunned. Never in a million years would she have thought this could
happen to her… to her family. Would they lose their new house? Would they be in debt for years?
After months of negotiation, the coffee shop settled with her for less than the total loss. Still, her family has the burden of paying back the judgment for years.
If only they’d bought umbrella insurance when their insurance agent recommended it. Especially when she found out how inexpensive an umbrella policy is.
What Does an Umbrella Policy Cover?
Umbrella insurance, sometimes called excess liability insurance, protects you from unforeseen major events. Your umbrella coverage will pay when you are liable for amounts more than your auto, home, or boat policy will pay.
Today, especially in California, there are many more high-value cars on the road. In a major accident, the typical auto liability limits of $50,000, $100,000, or even
$300,000 aren’t nearly enough to cover the potential cost of injuries and property
damage.
Or, perhaps a child is visiting your house and is severely injured. The medical costs could quickly exceed your homeowners liability limits.
These are just two of the countless ways an umbrella policy protects you from a
catastrophic loss. The event is traumatic enough — you don’t want to face
monumental debt too.
Most personal umbrella policies will also pay if you’re sued for false arrest, libel, or slander.
Who Needs to Buy Umbrella Insurance?
In the past, agents often only recommended umbrella insurance to clients with a net worth of $1 million or more. But today, umbrella coverage isn’t just for the rich.
If you’re sued, it’s not only your bank account, home, car, and investments at risk. Often, attorneys will go after your future earnings too.
Are you in the medical field? Or IT? A manager at a large corporation? You are a
prime target.
In fact, you have a need for extra liability insurance if you:
- Drive a car
- Own a boat
- Rent property (as a tenant or as an owner)
- Have assets you want to keep
- Serve on a volunteer board
- Are well known in your community
- Have a swimming pool or trampoline
- Coach kids sports
- Have a dog or other pet
- Post online reviews regularly
As you can see, that’s almost everyone!
Buying a Personal Umbrella Policy
Personal umbrella coverage will provide an extra $1 million to $10 million in
protection in addition to your home, auto, and boat insurance.
And the price is surprisingly affordable, especially when you consider what you
have to lose.
It’s quick and easy to add this important level of protection so you never have to
worry about the financial consequences of a major event.
Life can change in an instant. Be ready for anything that comes your way with an
insurance protection program customized for you.
Give us a call at 650-873-1255 and we’ll be happy to answer any questions you have about your potential liability risk and which umbrella policy is right for you.
