When it comes to keeping yourself and your family safe from the dangers of the outside world, you probably think you’ve got it all covered. What about lawsuits? Are you in the position to dish out hundreds of thousands or even millions of dollars should you or a family member get sued? If you think it couldn’t happen to you, you’re sadly mistaken. Just read the local headlines. The good news is there are certain things you can do proactively to help mitigate any potential damages and protect both your good name and your assets. Let’s take a look.
First, assess your current protection.
Be honest. How far do you really think the current coverage you have will go in the event of a hefty lawsuit? $100,000 may seem like a lot, but what if you caused an accident in which someone suffered injuries that totaled $250,000 or more? Your liability coverage would only cover a portion and you’d be stuck holding the bag on the balance. And, unfortunately, if you’re like most of us, chances are you don’t have an extra $150k just sitting around.
Could you really afford to cover such an incredible expense? In reality, without the right protection, you could potentially lose everything you’ve worked so hard for over the years.
Next, figure out what your options are.
You probably already have a decent amount of liability insurance in place, but as was just pointed out in the previous paragraph, it’s highly unlikely that it’s really enough – especially in the event of a lawsuit. You have a few different options. You could increase the amount of your current coverage, which will in turn bring your rates up significantly. You’d also need to up your coverage on each policy you own which is cumbersome and costly.
Or, a better and more cost-effective option – you could supplement your coverage with an umbrella policy. If you’re unfamiliar with this type of insurance, here’s how it works.
Umbrella policies provide additional coverage for all of your existing insurance products. That includes your auto, home, and even renters insurance. Additionally, umbrella insurance provides protection for things that your other policies probably don’t, such as personal injury to another individual’s reputation, invasion of privacy, false arrest and malicious prosecution (just a few of the many examples).
It’s important to note, however, that there are certain limitations to umbrella insurance. Specifically, this type of coverage does not protect against things like punitive damages due to reckless conduct on your part. But, in the event of an accident, it’s a great option to have.
An added layer of protection.
Umbrella insurance does pretty much what its name implies – it sits above your existing liability insurance coverage to provide additional protection for things that extend above and beyond what those policies cover. So, let’s say you have a liability limit of $250,000 on your auto insurance, but you cause an accident that results in the person you hit suing for and being awarded a judgment of $500,000. Your auto insurance would cover the first $250k and your umbrella coverage would take care of the rest.
The better news is that because umbrella insurance is designed for those rare, “rainy day” occasions, it is generally priced quite attractively. For instance, a policy that offers a $1 million limit might only cost a few hundred dollars a year. That’s much cheaper than raising your minimum coverage amounts on your existing policies! So, for just a couple hundred dollars, you can increase and extend your protection exponentially should you or someone in your family end up on the receiving end of a lawsuit.
In other words, it’s a win-win.
Can you afford to take a chance with your hard-earned money, assets and stellar reputation should someone turn around and sue you tomorrow? Protect yourself today by adding an umbrella policy to your portfolio. Call us today to receive a free, no obligation insurance quote.
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