Financial advisers generally recommend umbrella insurance to clients with Significant assets to protect, often before discussing anything else. An event that's unlikely to occur but if it occurs , it can disrupt your financial future forever.
Life is full of surprises and uncertainties. Anything can happen, from your dog biting the neighbor's kid to a multi-car accident during a rainy commute. And if you're held liable for any damages that result from these incidents, the costs could add up quickly. Injuries, property damage, lost wages, and more can all be factors that you'll be responsible for paying.
You've got some peace of mind with your home or auto insurance, but it only provides $300,000 in liability protection. If you're sued and a judgment is made against you for $1 million, you'll be left with a $700,000 bill to pay. That's a lot of money to come up with!
This is where an umbrella policy comes in handy. It acts as a safety net, kicking in once your primary liability coverage has been exhausted. If your umbrella policy covers the incident, the additional $700,000 will come from that policy, not from your personal assets.
Remember, all it takes is one serious accident and lawsuit to put everything you own, and will own in the future, at risk. That's why having an umbrella policy is so important. It's the easiest way to protect yourself and your assets.
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Personal umbrella policies typically offer between one and five million dollars of liability coverage. Consider your net worth when choosing your coverage –you could be sued for everything you have.
An umbrella policy is not a stand-alone policy. Your insurance carrier will typically require you to meet certain qualifications, such as having an auto policy with a certain level of liability coverage, in order to purchase umbrella insurance.
Even when you have umbrella insurance, your car or home insurance is your first line of defense. For example, if you are liable for $2 million in a car accident and your auto insurance covers $500,000 of liability, your auto policy covers the first $500,000. Your umbrella policy covers the remaining $1.5 million, assuming your policy covers the incident and that you purchased that much coverage. If you are liable for $250,000 in an accident on your property and your homeowners insurance covers $300,000, your umbrella policy won’t be needed.
If you insure a motorcycle, ATV, golf cart, snowmobile, motor home, or watercraft, your umbrella policy may provide additional liability coverage on top of those policies as well. Be sure to check with your agent to confirm your coverage on these types of vehicles.
A single umbrella policy typically covers all of your family members who are residents of your household.
Essentially, an umbrella policy gives you excess liability coverage on top of what your other policies provide. If you’re at fault for a serious accident, you’ll need it.
Umbrella insurance also gives you liability coverage in instances where other policies don’t. Examples include driving in a foreign country or renting a boat.
If you’re curious about how umbrella insurance might play a role in protecting the life you’ve built or plan to build.
For more information Contact Tans Agency @ 972.322 4978
Why you need Umbrella Policy
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