Top 5 Reasons to Buy an Umbrella Policy
If you have assets to protect, it is essential you buy an umbrella policy to cover your home and auto insurance policies. Claims can arise from many different situations. The below list are true-life stories that can easily happen to anyone.
- Auto Insurance Claims. A policyholder’s child loses control on a highway overpass. The car plunges off the overpass and lands on a row of vehicles for sale in a Lexus dealer’s Lot. Six vehicles are damaged to the tune of $250,000. The policyholder’s auto insurance covers $100,000 in property damage from any one accident. If the policy holder has an umbrella, it will pay the remaining $150,000. Otherwise the policy holder is left to fend for themselves.
- Homeowners Insurance. A homeowner has insurance that covers her liability for bodily injuries to others, up to $300,000 per accident. A neighbor who has three children under age 10 drowns in her swimming pool. His estate sues her for $1,500,000. Her homeowner’s insurance will pay all of its $300,000; if she doesn’t have an umbrella, she is responsible for the remaining $1,200,000.
- Boat Insurance. A man has a boat insurance policy that covers his liability for injuries to others up to $300,000 and an umbrella policy with a $2,000,000 limit. He loans his boat to a friend for the weekend. The friend takes it out on a lake with three buddies and a case of beer. He becomes intoxicated and plows into another boat late at night. The survivors and the estates of the deceased sue the driver and the boat owner. The court finds the owner 20% liable for the $5,000,000 judgement. His boat policy pays $300,000 and his umbrella policy pays $700,000.
- All-Terrain Vehicles. A man’s grandson from out of state visits him for the holidays. He takes the boy out for a spin on the ATV he bought the week before, but the boy bounces off and suffers critical injuries. The man bought coverage for the ATV under his auto policy, but the most it will pay is $100,000. The boy’s medical care will cost $750,000; his grandfather’s umbrella policy will pay $650,000.
- Personal Injury. A woman loudly repeats a rumor she heard about one of her neighbors. The neighbor sues her for defamation of character and wins $500,000. The woman’s homeowner insurance does NOT cover defamation, but her umbrella policy does! After she pays her $250 deductible her umbrella pays the rest.
Severe accidents like these can and DO happen to average people every day. When an event like one of the above examples occurs, an umbrella policy may be all there is to keep the person responsible from complete financial ruin.
Contact your insurance today to get quotes on an umbrella policy! Premiums can begin at $150 a year… a relatively low cost considering the peace of mind you will get should one of thee catastrophic events happen.