Umbrella Insurance
Umbrella Insurance
What you’ll discover in this report:
- How easy and common it is to be the target of a lawsuit
- How to get massive protection for just pennies a day
- What you should know about what’s not covered with Umbrella Insurance
- Tips on how to SAVE MONEY
If insurance is for a rainy day, umbrella insurance is for a storm! A day when someone hits you with a lawsuit for hundreds of thousands, even millions, of dollars.
Think it can’t happen to you? Just think for one minute about how more and more lawsuits are occurring in this country. You can’t pick up a paper these days without reading about somebody suing somebody else for . . . anything. You read the article and say, “That’s crazy. There’s no way somebody should be able to sue for that.”
Well, guess what? The courts are clogged with these “crazy” lawsuits, and sometimes the person bringing the lawsuit wins. So do you really need coverage for crazy lawsuits? Maybe not. You may not need coverage for a frivolous lawsuit but anyone can file a statement of claim and then you would be saddled with defense costs. An umbrella provides coverage for defense.
And remember, a lot of lawsuits aren’t crazy at all. Some get settled. Actually, most get settled. Often, the person being sued winds up having to pay the person who brought the lawsuit. Not to mention the fees the defendant has to pay to his or her attorney.
Is Your Current Coverage Enough to Protect You?
*Example: You are at fault in an auto accident that causes serious injuries to the driver of the other car and/or passengers of either vehicle. Your auto has a liability limit of $1,000,000 for all damages, including property damage and bodily injury.
How far do you think $1,000,000 will go? Especially if there is more than one other vehicle involved, the limit of $1,000,000 can be exhausted very quickly if the persons involved suffer injuries that keep them from working for a long period of time. The claimants could sue you for medical bills, lost income, and pain and suffering. In this scenario, $1,000,000 may not be nearly enough coverage.
If a judgment is rendered for over $1,000,000 your auto insurance will cover the first $1,000,000 and you are stuck with the rest.
In the province of Alberta, if you still owe money after these resources are exhausted, the court can order you to pay a percentage of your future earnings, called wage garnishment and could result in a lien against your property.
Umbrella insurance is for these very rainy days. While it may seem unnecessary, it really isn’t, particularly for people with homes and other significant assets to protect. Do you really want to hand over your home, savings or future earnings to someone you injure in an auto accident? It could happen. But it doesn’t have to.
Umbrella Coverage is Not Costly
Because it is designed for those very rare rainy days, umbrella insurance is cheap. It is also versatile. Umbrella insurance provides additional liability coverage not only for your auto policy, but also your homeowners or renters policy.
If you have “toys” such as boats, motorcycles, ATVs, snowmobiles or a motor home, the umbrella coverage can be designed to provide additional liability protection for these possessions as well.
*Note. Umbrella insurance doesn’t cover everything. For example, if you are sued and the court assesses punitive damages against you, those damages won’t be paid by your umbrella insurance. What are punitive damages? They are damages awarded to someone in order to punish the person being sued. Punitive damages are awarded for outrageous, totally reckless conduct — at least what a judge or jury perceives to be outrageous, totally reckless conduct.
You can usually buy umbrella policies with $1 million limits for $150 to $250 per year, depending on the number of cars, homes, “toys” and young drivers in the household. If you need more than $1 million limits, you can usually buy each extra $1 million of coverage for $100 to $200. Think about this. For only a few hundred dollars, you can increase your per-person liability limits 5 times, 10 times, or more — and it applies to your auto, homeowners or renters, and “toys” as well.
How Umbrella Coverage Works
Umbrella insurance actually “sits” on top of your auto, homeowners or renters, and other policies with liability coverage. Say you have a $1,000,000 liability limit on your auto policy. Say also that you cause an accident in which a driver or passenger in the other car is ultimately awarded $2,000,000 for their injuries and loss of income.
Your auto policy will pay the first $1,000,000 and your umbrella will kick in the remaining $1,000,000.
Because umbrellas provide coverage over the top of the auto, homeowners or renters liability limits, some insurers offering umbrella policies require you to have your auto and homeowners policies with these companies as well. That’s not typically a problem because most insurers are happy to be able to provide someone’s auto, homeowners or renters, and umbrella insurance, and often offer multi-account discounts which reduce your costs even more. We also represent companies that can write a “stand-alone” umbrella in those cases where you need to place your auto and home coverage with different insurance carriers.
Most insurers offering umbrella coverage require you to have liability limits of a certain amount on your auto and homeowners policies. These limits are pretty standard and if necessary the cost for increasing your underlying policies to these limits is fairly minimal.
Our licensed brokers will be happy to assist you in reviewing your options and finding the best combination of coverage and value for your budget and your family’s needs.
Personal Umbrella Insurance