They’re definitely nightmare situations: You’re driving your car or boat and you cause an accident that critically injures one or more people; or, a contractor doing work on your home trips on the carpet and sustains life-changing injuries. As if being liable for these accidents isn’t bad enough, think about what would happen if the families of those injured sue you for millions of dollars in damages and legal fees. If you don’t have the money to pay these obligations, you are likely to have your future wages garnished, which can spell financial ruin now—and for years to come.
These “what if” situations are certainly something no one wants to experience in real life. However, it is important to be prepared if they do. In addition to exercising appropriate caution to avoid these kind of accidents, having umbrella liability insurance can help you preserve the financial security of you and your family, should such an incident occur.
Lack of umbrella liability insurance is a common gap in Americans’ financial plans.
Financial experts agree that one of the biggest gaps in many Americans’ personal financial plans is the lack of umbrella liability insurance. This type of insurance is designed to cover costs that exceed the limits on traditional home, auto and watercraft insurance—preventing you from being burdened by potentially catastrophic financial losses.
Standard homeowners, auto, and personal watercraft policies offer limited liability protection.
You may be surprised, but it is unlikely that your existing home, auto, or personal watercraft policies provide all the protection you need. Consider that many of these standard policies often provide only $100,000 to $300,000 in liability coverage—leaving your personal wealth vulnerable to devastating lawsuits that may result from accidents such as those described above. This is when an umbrella liability insurance policy can be invaluable, providing up to $100 million in coverage, kicking in only after the liability insurance payout from your homeowners, auto or personal watercraft insurance is exhausted.
Umbrella liability insurance is an easy way to protect your net worth and financial security.
Experts recommend that most people have at least $1 million in umbrella liability insurance coverage. If your net worth is $500,000 or more, you should definitely consider coverage at least equal to it, while also considering the amount needed to protect your lifestyle and future income. In addition, as your wealth grows, you should review your umbrella insurance policy to make sure it continues to provide adequate coverage.
Considering the value of the coverage and peace of mind that an umbrella liability insurance policy provides, it is a relatively inexpensive and easy way to close the gap in your financial plan, ensuring that your future financial security is not at risk should you or a family member be held liable for damages resulting from an unfortunate accident or other event.
Do you have questions about umbrella liability insurance or other insurance coverage?
Let’s talk! Our professional insurance representatives can answer any questions you may have about umbrella liability insurance and how this protection can complement your existing insurance coverage. Contact us today!
About the Author:
Kim Parsons, resides in Cassopolis, MI and has been in the Commercial Service Department at Kemner Iott Benz since 2008. Kim is beginning her 6th year competing in a beach volleyball summer league, has a passion for riding her motorcycle and loves taking her dog, Finn, on long walks in the summer. In the winter, Kim enjoys all activities, but particularly loves to snowboard.