Lawsuits happen every day, for all kinds of reasons. They’re the number one reason umbrella insurance is such a good idea for so many people. An umbrella policy gives you an added layer of liability protection over and above your homeowner’s, auto and other policies. So, when the coverage limits on those policies are reached, the umbrella policy kicks in.
Yes, it’s coverage for a rainy day, and many think of it as a luxury. But in today’s litigious environment, those rainy days are happening more often, and the last thing you need is to have your entire nest egg wiped out in a lawsuit.
10 signs you may need an umbrella insurance policy:
- You have a swimming pool, a hot tub and a trampoline in your backyard and regularly have visitors. These are great features to have at your home, but statistically, they’re big sources of injuries and lawsuits.
- You have a home office or business that customers regularly visit. This raises your risk of an incident on your property.
- You have a number of automobiles and several drivers in the household. The more vehicles and drivers you have, the more vulnerable you are to incidents and lawsuits.
- You own vacant land the public can access. All it takes is someone getting hurt on your property – even if they’re uninvited trespassers – to end up in a lawsuit. It's even riskier if you lease your land out to hunters.
- You serve on a board of directors at a local charity. People who serve on corporate boards are generally protected from personal liability, but that’s often not the case with those working for charities or nonprofits.
- You’re having major renovations done on your property. Anytime construction work is going on, the risk of injury goes up. Even if you’ve purchased home construction insurance, an umbrella policy can protect you if the limits of that policy are ever reached.
- You own rental properties and act as landlord. Just remember – the more tenants you have, the higher your risk of a lawsuit.
- You own a couple of ATVs, a boat and a golf cart. These are fun toys, but they can be liability magnets.
- You’re a prominent public figure in your community. Prominent people tend to attract lawsuits because others assume they have something to lose.
- You regularly host parties with 25 or more guests. Home parties increase the chances of someone getting injured. If you prefer to host your parties in a public facility such as a park, community center or group picnic area, you may be required to purchase an umbrella policy.
How much coverage do you need?
So, you’ve decided to check out umbrella insurance. How do you know how much to get? Start by calculating your net worth. Add up the value of your assets – your home, cash in the bank, stocks and bonds, retirement accounts and anything else of financial value – and then subtract the value of your debts. Now look at how much liability coverage you have on your homeowners’ and auto policies. Are those limits enough to cover you if get sued?
Umbrella policies are usually available in units of $1 million in coverage. It’s one of the best investments you can make, since the coverage is affordable and can offer valuable protection for your assets.
Is umbrella insurance right for you? Contact the Texas insurance professionals at Higginbotham and we’ll help you decipher your options.