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Do You Need An Umbrella Insurance Policy?

There are many types of accidents that can result in damages that exceed standard liability policy limits.


You’ve put years of hard work into building your financial security. To protect your investments, you carry insurance for your home and your vehicles. If you’ve ever wondered if you should also have an umbrella insurance policy, consider the following scenario:

One day on the way to work, Travis became distracted for a second, and ran into an SUV with a mom and three kids onboard. The SUV was severely damaged, and the mom and one of the children were seriously injured, requiring hospitalization. The mom, who was an executive at a large local company, was unable to work for six months, and suffered some permanent impairment. The family sued Travis for $3.5 million, well beyond the liability limits of his auto policy. Now what? Suddenly, Travis’ personal assets were at risk – all due to a single accident that happened in the blink of an eye.

There are many types of accidents that can result in damages that exceed standard liability policy limits. For example:

  • A neighbor’s child could be seriously injured on your play structure
  • Your dog could attack a delivery person
  • You could post a scathing online review and get sued for defamation
  • You could host a party and then be held responsible when a drunk guest runs over a pedestrian afterward

Lawsuits happen every day. Do you have the financial protection to weather this kind of storm?

If you’re relying on your homeowners or auto insurance policy, you probably don’t. So what’s the missing link that could make sure you’re protected? A personal umbrella policy. This policy provides liability coverage over and above your homeowners or auto policy, kicking in when the liability limits on those policies are reached.

How do you know if your assets are protected?

Take a few minutes to add up all of your assets – your home and other personal property, bank accounts, stocks, bonds, and available funds from your retirement plan(s). Next, check the liability coverage on your homeowners, auto, and other policies. Does each policy have enough liability coverage to cover your assets? If not, you should seriously consider the added protection of an umbrella insurance policy.

It’s not just for the wealthy.

Since an umbrella policy is optional coverage, many believe it’s a luxury that only the wealthy can afford. It’s true that if you have a high net worth or a high risk lifestyle, you should definitely have an umbrella policy. But regardless of income or lifestyle, most people have assets they’ve worked hard to earn, and everyone faces big liability exposures that could easily exceed standard insurance policy limits. An umbrella policy is also more affordable than many realize. Considering everything that’s at stake, it’s one of the most reasonable and inexpensive hedges you can take against losing your personal assets.

To find out more about adding this missing link to your family’s financial protection, speak to your independent agent.