America has gone mad with lawsuits. 15 million civil cases are filed in the U.S. each year. If you don’t have the proper insurance, you put yourself at risk. That’s why umbrella insurance is here to help.
Umbrella insurance is a type of liability coverage that goes beyond your homeowners, renters and auto insurance. It kicks in once you exceed your existing policy limits.
How Umbrella Insurance Works
Umbrella insurance covers injuries, property damage, lawsuits and personal liability situations. While your auto and homeowners insurance may cover some of these items, Umbrella insurance covers you beyond your current limits and even covers things other policies do not.
Here’s an example:
Say you are in a car accident, and the cost of injuries is $400,000. The bodily injury limit on your auto insurance policy is $200,00, leaving you to pay the remaining $200,00. If you have Umbrella insurance on the other hand, it will pay above your auto insurance limits up to the limits you set on your umbrella policy.
Do You Need Umbrella Insurance?
To determine if you need umbrella insurance, you need to assess your risk of a lawsuit. Those who are at higher risk of a lawsuit include:
- Wealthy individuals
- Owners of pools or trampolines
- Pet owners with potentially dangerous pets
- Those with teenage drivers
- Individuals who host regular parties
Next, you need to look at your current assets and see if they are all covered by your current insurance policies. If your assets exceed your coverage limits, you may consider getting umbrella insurance.
How Much Coverage Do you Need?
Typically, umbrella insurance coverage in Nashville, TN starts at $1 million and goes up in million dollar increments. You will normally need to carry a minimum underlying coverage on your renters or homeowners policy before you can purchase umbrella coverage.
It’s recommended you get enough umbrella insurance to cover your net worth. To calculate your net worth, use thisnet worth calculator.
Most times $1 million of umbrella insurance is enough, but if it’s not, you will need to consider bumping up your coverage.
What Umbrella insurance Doesn’t Cover
There are some items that umbrella insurance doesn’t cover, including:
- Personal Property: Umbrella insurance only applies to damage done to other people’s property,
- Business Losses: Any loss related to your business or damage to your business’s property is typically not covered.
- Criminal or Intentional Actions: If the loss was caused by your own intentional harm or illegal behavior, it will not be covered
- Contracts: Umbrella insurance doesn’t cover verbal or written agreements.
Protect Your Nest Egg
Umbrella insurance is great for providing the additional coverage you need for life’s most difficult circumstances. Get a free quote today, or click here to learn more about how umbrella insurance can protect your nest egg.
