The Importance of Personal Umbrella Insurance for Protecting Your Assets
As a responsible adult, you have likely already taken measures to protect your assets. You may have purchased a home or car insurance policy or invested in an emergency savings fund. However, what many people fail to realize is that these precautions may not be enough to fully protect your financial future in the event of a catastrophic accident or lawsuit.
That is where personal umbrella insurance comes in.
What is Personal Umbrella Insurance?
Personal umbrella insurance is an additional layer of liability insurance designed to protect your assets beyond the limits of your existing policies. It is typically sold in increments of $1 million and can be purchased for as little as a few hundred dollars per year.
A personal umbrella policy can provide coverage for liability claims not covered by your primary insurance, such as a lawsuit involving a serious accident or defamation claim. It can even cover the legal fees associated with defending yourself in a lawsuit, which can be exorbitant.
Examples of How Personal Umbrella Insurance Can Help
Here are a few hypothetical scenarios to illustrate the importance of having personal umbrella insurance:
– You are a homeowner and your dog bites a visitor, resulting in significant medical bills. Your homeowners insurance policy has a liability limit of $300,000, but the medical bills alone exceed that amount. With a personal umbrella policy, the additional costs would be covered.
– You are involved in a car accident and a passenger in the other vehicle suffers a permanent injury, resulting in a lawsuit. Your auto insurance policy has a liability limit of $500,000, but the damages awarded in the lawsuit exceed that amount. Personal umbrella insurance can provide additional coverage to protect your assets.
– You are a landlord and a tenant sues you for damages resulting from an injury on the property. Your landlord insurance policy has a liability limit of $1 million, but the damages awarded in the lawsuit exceed that amount. A personal umbrella policy can help cover the additional costs.
Conclusion
While personal umbrella insurance may seem like an unnecessary expense, it can provide valuable protection for your assets and financial future. With coverage that can be added for a relatively low cost, it is a small price to pay for the peace of mind that comes with knowing you are fully protected. Don’t wait until it’s too late to consider this essential protection for your assets.
