Sure, you have insurance. But do you have an umbrella?

By Higginbotham on August 26 , 2014


It can happen in an instant. You’re driving home from work, you get distracted for a split second, and you slam into the car in front of you, causing serious damage to the other vehicle and severe injuries to the driver, a 62-year-old heart surgeon.

Will the liability coverage on your auto policy be enough to cover it? Probably not.

Of course, it depends on what kind of limits you chose when you bought the policy. Your auto policy will cover the other driver up to the limit you chose, say $250,000. But the other driver suffered serious injuries that will prevent him from working for six months – and remember, he’s a heart surgeon, so he has a high income.

So now what?

Suddenly he’s suing you for $1 million for his inability to earn a living for the next six months – way beyond anything your auto policy will cover. And that means you could be up against a wall, with your home, property, bank accounts and other personal assets suddenly on the line.

An umbrella policy would protect those assets and save you from financial ruin.

A personal umbrella policy (PUP) provides liability coverage over and above your auto or homeowner's policy, kicking in when the liability limits on those policies are reached.

Why is this coverage more crucial now than ever?

All you have to do is open a newspaper to see examples of big lawsuits based on auto accidents or liability claims. If you’re ever found at fault for a major accident, for a serious incident on your property or for an accident halfway around the globe, your chances of being sued are pretty good. And the auto accident scenario is just one example of how you could be at serious risk. Consider these real-life possibilities:

  • An accident on your back yard swing set causes serious injuries to a neighbor’s child
  • Your dog chases down and attacks a motorcycle rider passing by your home
  • You post a negative online review that results in an alleged defamation lawsuit
  • Your barbeque propane tank explodes causing a fire that damages a neighbor’s home
  • You throw a party at which alcohol is served and a guest drives drunk, killing a pedestrian

So why don’t more people have an umbrella policy?

It’s optional coverage, and money is tight for everyone in this economy – so an extra insurance policy such as a PUP just isn’t a priority for many people. And unfortunately, many people buy into the myth that an umbrella policy is for just for wealthy people. But as you can see, the situations above apply to everyone.

Almost anyone can benefit from an umbrella policy.

The fact is, most people have more exposure than they realize. Anyone who owns a home or drives a vehicle is at risk of getting wrapped up in a costly legal action. In reality, a PUP is one of the most sensible and reasonably priced policies you can secure. When you consider all you have to lose, a PUP is a pretty inexpensive way to protect yourself from losing it all.

Contact Higginbotham today to find out more about how an umbrella policy can give you added peace of mind.

Tags: Home & Auto