Everything You need to know about an Umbrella policy
Have you considered adding a personal umbrella liability policy? Our nation’s legal system holds you accountable for injuries you or a covered member of your family may cause to others. Consider what would happen if there were a settlement (or judgment, if it went to court) of $2.5 million as a result of an auto accident for which you were found liable, but your auto policy only has a limit of $500,000. After the insurance company pays the judgment of $500,000, you would be on the hook for the remaining $2 million.
To help mitigate this risk you need an umbrella policy. These policies provide additional coverage once the liability limits on your homeowner’s or auto insurance policy are exhausted. In the example above, if you had a $3 million umbrella policy, your auto policy would pay the limit of $500,000, and your umbrella insurance would pay the other $2 million of the $2.5 million settlement or award. Thus, your assets would not be at risk of being taken by the court.
When deciding what level of coverage you should carry on an umbrella policy, you should ask yourself whether you have assets that you don’t want to put at risk in the event of a catastrophic liability incident. An umbrella not only applies to liability incidents that occur in your car, but to other possible liability risks as well. Do you have a swimming pool, trampoline, swing set, or other recreational equipment where someone could be injured? Also, if your child injures someone and you are sued, excess liability would be covered by the Umbrella policy too. In addition to those examples, most umbrella policies can give protection if you (or your teenager) accidentally posted something on social media that results in legal action. This is because most of these policies include a “Personal Injury” clause, which covers things like libel and slander.
Please call us today to discuss your exposures, possible gaps in coverage and how an umbrella liability policy can protect your future. *Also there could be savings on your home and auto policies if you add an umbrella!
Thanks,
Palmetto Insurance