What is the Benefit of Umbrella Insurance & How Do I Get It?Financial Planning Insurance
A 60-second read by the Baron Team: You probably have homeowner’s insurance for your home and car insurance for your vehicle, but do you have umbrella insurance? In a society where many of us are concerned about personal liability and the possibility of being sued rightly or wrongly, the more assets you accumulate the more important personal liability protection becomes. Umbrella insurance will help to cover your legal expenses if someone is injured by your car or in your home. For example, imagine that you are driving to the grocery store on a Saturday afternoon. You brake for a running deer and the person behind you rear-ends your car and is injured. Now, the other driver wants to sue you for more than your auto policy will cover. This is where umbrella insurance would come into play. Umbrella insurance will help you pay for the difference instead of having to take that money out of your own personal savings.
When looking to get Umbrella Insurance, there are a few things you may want to know:
- You must ask for Umbrella Liability Insurance. Since the commissions are so small, your insurance agent may neglect to mention it.
- Insurance companies may require you to carry a required amount of liability insurance on your homeowners and automobile policies and to place both your auto and homeowner’s policy with the same company. Perhaps do some research or talk to your insurance agent about this.
- Depending on your situation, you may want to look to either have enough protection to exceed your assets or carry a minimum of $2 million of personal liability with an inexpensive umbrella liability policy.
According to William Luyke, Vice President for The Firm, Inc., an independent insurance agent that is part of Alera Insurance Group, with 2,000 employees across the country:
“It is better to purchase an umbrella policy while any children in the household are young. Rates and acceptability change once children begin to drive.”
If you have any further questions, don’t hesitate to contact the Baron Financial Group Team.
Disclosure: This is a general communication being provided for informational purposes only. This material is not intended to be relied upon as a forecast, research, tax or investment advice.