You have a retirement plan. This means you are ahead of the game, right? Or perhaps you are getting ready to send your kids off to college next year. You can finally sit back and relax, right? If you don't have an umbrella policy, don't get too comfortable. Getting hit with a liability lawsuit could put all your plans on hold.
Here is an example that happens all too often. You are in an auto accident and the other driver and passengers are seriously injured. The claim reaches $1.5 million and your liability auto insurance only covers $100,000. If you don't have an umbrella policy to extend that coverage, you will be responsible for $1.4 million. If you don't have that kind of money available, your assets will be seized. No one wants to have to rebuild their lives after something like that. However, umbrella insurance is one of the least known types of liability coverage.
In the event that a claim exceeds your underlying policy limits, a personal umbrella policy may be able to help by providing:
- Additional liability coverage from $1 million to $5 million for your primary and secondary homes, rental properties, automobile, motorcycle, watercraft, RV and more
- Coverage for most types of accidents - not just auto
- Legal defense fees not covered under your current auto policy
- Extended liability protection that helps protect your current assets and future earnings
Usually umbrella policies start at $1 million in coverage and are sold in million-dollar increments. You will also typically need to have minimum underlying liability limits on your homeowners and auto policies before you can buy an umbrella. To determine how many coverage you need, simply calculate your net worth by taking the value of your retirement and other assets and subtracting your debt.
The most important thing is to talk to your insurance agent. Call your agent directly or our main office at (314) 752-2500. Don't let something unexpected ruin what you have been working towards your whole life.
