There are 15 types of people who absolutely must consider an umbrella insurance policy if they want to make sure that they have the right amount of protection that they need to control and protect their families and their assets from loss.
In this article, we will talk about who these 15 types of people are, as well as how umbrella insurance works and what you need to do to get the right amount of coverage at the most competitive rates on the market.
How Umbrella Insurance Works
Umbrella Insurance is essentially “extra” liability insurance.
If you have a homeowners policy or auto insurance and have a claim against you, umbrella insurance will help pay for any liability that exceeds the liability insurance that is in your homeowners or auto policy.
For example, you run a read light and injure a surgeon in a Ferrari. The vehicle has $200,000 worth of damage, the doctor breaks his arm and has $300,000 worth of lost wages on top of $50,000 worth of medical bills.
If your cars insurance policy has $150,000 of liability you would be responsible for $400,000 of out of pocket.
Without umbrella insurance coverage, you would most likely have to use your savings or liquidate a portion or your assets to pay for this.
However, umbrella insurance would pay for this extra $400,000 if you did have it.
Who Needs Umbrella Insurance?
Now that you know the basics of how umbrella insurance works, let’s see who should be considering umbrella insurance in the first place.
People who own property
If you own any property of value then you need to consider umbrella insurance coverage.
Have significant savings or other assets
We live in a society that can lead to legal actions that could wipe out your families wealth.
If you have an decent net worth it is important that you protect it in every way possible.
Travel outside the U.S.
If you are in an accident while traveling abroad your normal insurance coverage may not cover you. In these cases, it is always wise to protect yourself from any unforeseen loses.
Own things that can lead to injury (pools, trampolines and some breeds of dogs)
If you have a trampoline or pool in your backyard and someone is injured, you’re homeowners policy may not cover it as a liability. There could also be injuries that exceed the amount of liability coverage that you have in your homeowners policy. Having an umbrella policy will keep you from having to pay out of pocket for any surprise accidents because of pools.
If you're a landlord, you are more likely to be sued than someone who isn’t. It’s just a fact. Also a fact, you need to consider getting an umbrella insurance policy.
Coaching kids’ sports
You mentor the youth and help them build character through sports…
But one slip and fall could lead to a big loss if your aren’t covered fully.
Nonprofit board member
Being a board member for a nonprofit is a huge responsibility and it comes with a lot of risk. Best to stay safe and protect yourself from excess liabilities.
You know the saying, “No good deed goes unpunished”. While we always hope that isn’t true it’s always a great idea to be prepared...
Regular product and business review poster
You see it as part of your civic duty to warn potential customers about poor quality products or service from companies you do business with. If you say something that hurts a business they could sue for defamation of character, which would put your personal business in jeopardy.
Athlete in sports where you could easily injure others
If you are a skier or participate in any other extreme sports and you injure someone, that person may need more money that your personal liability covers alone.
Teen driver at home
Teens are typically not as polished of drivers as an adult. It’s best to cover your cars with umbrella insurance to make sure that your teen is not putting your life’s savings at risk.
Own more than one residence
Own a vacation rental or summer home? Better look into an umbrella policy to cover anything that goes over the total amount of your regular policies liability.
Employ domestic workers
Having a baby sitter could become a disaster if you aren’t fully covered.
Having house guests and hosting parties is great fun and an excellent way to get to know your neighbors but no one wants to risk losing their home because of it.
Active on social media
Some people use social media to speak their mind, which could present a little danger when it comes to slander and libel claims.
How To Buy Umbrella Insurance
If you are among the list of those who need umbrella insurance you need to know this before we go any further.
If you have the minimum liability on your car insurance policy of $100,000 there is over a 50% chance that a personal liability settlement would exceed your total coverage amount. As a matter of fact, 19% of settlements had an award over $1 million according to Current Award Trends in Personal Injury.
The good news…
Umbrella insurance is likely sold at much lower rates that the liability insurance attached to your car insurance.
Umbrella coverage is sold in increments of $1 million with the first million costing between $150 to $300 per year and every million after usually costing an additional $100.
How To Get An Umbrella Insurance Quote
Getting an umbrella insurance quote seems like it should be a very simple and straightforward thing because it really is.
The main issue that people run into though is getting insurance buy going directly to the insurer that is most popular.
The reason that this is not always a good idea is because they tend to give you what you want at a whatever price they have.
While the insurance policy is good, the rates are “one size fits all”
What most people want is the right insurance at the best rates…
That’s why we work with over 40 insurance carriers to find our clients the most competitive rates on umbrella insurance available today.
Get an umbrella insurance quote today
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