If it has never happened to you, it’s very difficult to imagine yourself, or a loved one, being involved in a serious automobile accident. But it happens all the time. What’s worse is that many drivers only purchase the minimum amount of liability insurance required by law. This can be cause for major financial issues if you are held liable for a claim exceeding the coverage of your other insurance policies. This is when an umbrella insurance policy would be the right choice.
An umbrella policy is often the only line of defense for someone who is at fault in an accident that goes beyond the limits of basic homeowner’s, renter’s and auto insurance policies.
Things to Know About Umbrella Policies
Umbrella policies protect assets like your car, house, retirement fund, any money in your bank accounts, and even your future income. If you are found to be at fault in an accident, and the other party chooses to sue, it is not impossible that you could be slapped with a claim upward of $1 million. Now, if your liability insurance only covers $100,000, as many do, you’re stuck with an enormous bill, and your assets are at risk of seizure.
An umbrella policy will protect your assets from an unforeseen event, in which you are held responsible for damages or the bodily injury of another person. If a party files a lawsuit against you that exceeds your regular policy limits, an umbrella policy would cover not only bodily injury claims, but property damage, libel, slander, even court or legal fees.
Typical umbrella policies start at $1 million in coverage and are sold in million dollar increments. Most insurance companies will require you to carry the minimum underlying liability coverage on a homeowner’s or renter’s policy before purchasing umbrella insurance.
The umbrella insurance policy may be less expensive if purchased from the same provider as your other auto or homeowner’s insurance. One million dollars is usually enough, but if your assets are of higher value, you'll want coverage that is at least equal to your net worth. Increasing the umbrella policy to cover all of your assets accordingly shouldn’t cause your premium to be much higher.
Aside from using umbrella insurance to protect yourself from at-fault costs, you can also use an umbrella policy to extend your minimum underinsured and uninsured motorist policies to protect yourself from the negligence of another driver. Insurance companies don’t have to offer umbrella policies, so it is important to specifically ask, not only for a basic liability umbrella, but to also have it extended to your underinsured and uninsured motorist policy.
Umbrella policies are a great safeguard against unforeseen disaster. It’s important to know what options you have for insurance, so call your provider if you have any questions about your coverage or if you’re interested in securing a policy better suited to your needs. For more information, get your free copy of “The Ultimate Guide for Automobile Accident Victims” here to learn more about what to do after a car accident and tips the insurance company doesn’t want you to know.
Regardless of the type of insurance policy you possess, if you or a loved one have been injured in an automobile accident and are seeking representation for injuries, please contact the attorneys of Hupy and Abraham at 800-800-5678 for a free consultation.