Umbrella Archives

Is it worth securing umbrella insurance? Sales agents typically encounter this question from their customers. Indeed, you may have heard it in passing and not fully understand what it is.

Simply put, umbrella insurance kicks in right after your other liability coverages max out. So, for instance, if your policy only pays claims up to $100,000 and your hospitalization costs are significantly more than that, the umbrella insurance provides fail-safe protection that you can enjoy.

There’s a reason why this type of insurance is also called “asset protection.” It’s because you don’t need to risk your belongings or valuables to cover exorbitant expenses.

Why More People Don’t Have Umbrella Insurance

According to a Chicago Tribune article, only 1 in 10 people have umbrella insurance. Most people may think getting one is not at all that necessary.

One reason why people are wary of umbrella insurance is the misconception that it’s only for the rich. However, keep in mind that hindsight is always 20/20. Most seem to think that tragedy only happens to other people, and it’s already too late when they fall prey to their own complacency.

Take this scenario, for instance:

You are a small pop-and-mom store, and a kid playing inside your shop tripped and broke his arm. The angry parents, who should have been watching over the boy in the first place, decide to haul you to court for damages.

Where do you get the money to pay for legal fees? Millionaires or billionaires are not the typical targets of civil lawsuits since they have the money to drag the trial to eternity. You are.

Umbrella Insurance Coverage

Umbrella insurance covers a wide range of claims because it includes all policies. You will enjoy protection if the following scenarios occur:

If your dog bites someone or another pet;
If you run over someone;
If you damage property when you crash into a house, fence, or another car;
If you injure somebody accidentally;
If your child gets sued for cyber libel;
If you are a business owner or board chair and face a lawsuit for a company-related issue; or
If you are driving outside the country and get involved in an accident.

However, the policy will not cover the following:

If you commit a criminal act;
If you intentionally hurt or injure someone;
If you renege on a contract;
If you violate an agreement with a business party;
If you infect someone with an infectious or fatal disease; or
If the damages result from terrorism.

Maximizing Your Umbrella Insurance

It’s a good rule of thumb to secure umbrella insurance that will cover the amount equal to your net worth.

However, maximizing its value is always a good idea if you are taking on additional policy. Here are some ways to do it:

Understand what your policy covers

Don’t simply leave everything to your insurance company. Instead, call your agent and go over your policy once again. Present some real-life scenarios that may apply to you to gauge how much protection you have.

Read the details

If you have a lawyer on retainer or some lawyer friends and relatives, let them comb through the fine print. You probably heard all the horror stories concerning loopholes that give insurance companies an escape plan to avoid paying a claim. The lawyer should eliminate the impression that umbrella insurance is just another money-making scheme.

Ensure you get the right coverage

Umbrella insurance is not all-inclusive. For instance, if you are an entrepreneur, you must look for the phrase “business pursuits.” Different professions also require specific coverages. For example, a doctor needs professional liability in the face of a malpractice lawsuit. A publisher may need protection against libel or cyber libel. A laundry shop owner may require additional security against theft lawsuits.

Get as much protection as you can

One misconception about umbrella insurance is that it’s expensive. Nothing can be further from the truth. In fact, you can get as much as $1 million coverage for as little as $200-$300 annually. While thinking of your net worth, you must also consider future income loss if a potential lawsuit severely interrupts your life or business. In addition, with today’s cancel culture, your reputation may be irreparable due to a damaging social media post, even if the incident in question is not your fault.

Protect Yourself and Your Assets with Umbrella Insurance

Umbrella insurance is an additional investment, although some may argue it’s an expense. The sentiment is understandable, especially if people have been paying for years without applying for a single claim.

However, not using your umbrella insurance is a blessing. It only means that you have made it this far unscathed.

Make sure to talk to an agent to determine what type of umbrella insurance you need. You don’t want to risk destroying your lifetime’s worth over a single unexpected event.

Umbrella Insurance additional coverage

Knowing why you need a home or car insurance policy is a no-brainer. But what about an umbrella insurance Raleigh policy? Not many people know about or understand this type of insurance. If you’re one of those people, you’re in the right place.

Umbrella insurance falls under personal liability insurance. This kind of insurance becomes crucial when your home or car insurance is not enough to cover liability claims against you. In short, it provides excess liability insurance or additional coverage beyond your other insurance policies. Many consider this kind of insurance as protection for their assets because if your current policies can’t provide coverage, you might lose your possessions trying to settle lawsuits.

Umbrella Insurance additional coverage

Specifically, an umbrella insurance Raleigh policy has the following benefits:

It is an affordable way of gaining extra liability coverage to protect you and your assets. Though rare, losing a lawsuit where the total cost of damages exceeds your home insurance or car insurance coverage is not impossible. In this case, umbrella insurance can cover the additional liability costs. Without it, you might lose your savings and assets to keep up with the costs of damages or injuries.
Your family members will also receive protection. Of course, your child or spouse can get a lawsuit for causing harm to others. When this happens, your umbrella insurance will cover the damages over what your home or car insurance already covered.
Umbrella insurance can also provide coverage against libel, slander, and false imprisonment – claims that your home or auto insurance doesn’t cover.
For landlords, umbrella insurance can cover liability claims not included in home insurance and renter policy.
Your home or car does not need to be involved in an accident or unexpected situation for you to file a claim. Additionally, it can be used even when you’re out of the country.

Umbrella insurance Raleigh policy is quite beneficial for people with higher net worth. But, of course, with more significant assets come more significant losses. So, for you to protect what you have, you also need to have additional coverage. However, policyholders must understand that umbrella insurance does not cover their property or possessions. It simply provides protection from liabilities made against them.

Do you need umbrella insurance? If you’re undecided, go with the general rule that if the total value of your assets exceeds your home or car insurance limits, then you most likely need it. Or you can simply ask yourself if you are at risk of being sued. If yes, umbrella insurance is undoubtedly for you.

For more information about insurance, please read the following posts: Builder’s Risk Insurance, and Business Insurance.

Umbrella Archives - Zacharko Insurance Agency

How to Maximize Your Umbrella Insurance

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