Why Every Family Should Consider Adding Umbrella Insurance to Their Coverage
What if something terrible happened and your current insurance was not enough to protect you?
Most drivers have liability coverage to protect themselves in case of an automobile accident, and homeowners have this protection built into their home policies. But there are limits to liability, and you will be on the hook to pay for anything that your policy does not pay out. This is why it is so important for your family to have umbrella insurance.
What is this policy, exactly? What kind of benefits does it offer, and why does it provide more peace of mind than any other policy? The answers to all of these questions and more await. Just keep reading or check with your InsureOne agent to discover everything you need to know about umbrella insurance for families.
What Is Umbrella Insurance and How Does It Work?
What does umbrella insurance cover, exactly? The short answer is that this policy is designed to offer extra liability coverage for you and your family. If your existing coverage ends up being insufficient to cover damages you are liable for, an umbrella policy will pay the rest.
Without it, you could be responsible for paying the remaining costs out of pocket. But why would you need additional coverage, and what does this additional financial protection look like? Below, you will find the answers you need.
Understanding Liability Beyond Your Standard Policies
Every liability policy has a certain limit, and it may seem very high, such as a $300,000 limit on your auto policy. However, if you are liable for an accident and get taken to court, you may have to pay a settlement that exceeds this amount. Depending on the size of the settlement, you may still end up having to pay $100,000 or more in costs out of pocket, and most people simply cannot afford to do that.
How Umbrella Insurance Provides Extra Financial Protection
The biggest benefit of umbrella insurance is that it provides extra financial protection. A personal umbrella policy has a much higher liability limit, and it only pays out after your primary policy has been exhausted. In the above scenario, this would cover the additional $100,000 without you having to pay.
Why Families Need Umbrella Insurance
While everyone can benefit from additional protection, umbrella insurance for families is particularly important. The primary reason for this is that when your children start driving, the odds of someone in your family being liable for an accident skyrocket.
Statistically, teens are more likely to get into car accidents than other drivers, and this increases the risk that they will be found liable for damages. When you have family umbrella insurance, though, you do not have to worry that you will have to pay major out-of-pocket costs if they get into an accident that causes major injuries or even death.
Common Scenarios That Could Lead to Liability Claims
Here is a common scenario that explains why families need umbrella insurance. Imagine that your teenager is driving in rainy weather, and the slick road causes them to hit another driver.
Should that driver get injured and sue, the family might be on the hook for anything the auto policy does not cover, ranging from medical bills to court settlement costs. However, family umbrella insurance provides peace of mind because you know that all these costs and more will be covered without you having to go into serious debt.
Protecting Your Assets and Future Income
When someone must cover liability costs out of pocket, they often have to sell assets in order to do so. For example, you might have to sell the family home. Additionally, your future earnings could be at risk. This is a big part of why families need umbrella insurance: With it, you know your costs will be covered, and you will not have to sacrifice your home or your future income (potentially via wage garnishments) after an unfortunate accident occurs.
How Umbrella Insurance Offers Peace of Mind
As noted before, one of the biggest benefits of umbrella insurance is that it provides you and your family with peace of mind. You may never need the extra liability coverage this policy provides, but without it, you, your spouse, or your children may be just one car accident away from crippling, life-changing debt.
How Much Umbrella Insurance Does Your Family Need?
Now you know why umbrella insurance for families is so important. But that leads to the logical question: Just how much coverage do you actually need?
There is no “one size fits all” answer for any given family or personal umbrella policy. To figure out what is right for you, it is important to understand the factors that determine coverage limits and how to balance cost vs. protection.
Factors to Consider When Choosing Coverage Limits
At the bare minimum, your umbrella policy should cover the value of all your assets, including your house, your investments, your savings, and so on. If you think you will earn substantially more in the coming years, be sure to factor in those earnings.
Finally, consider liability risks: whether your children are driving, whether you have a dog that may bite someone, and so on. Considering all of these factors will help you determine the right amount for your family and its needs.
Balancing Cost vs. Protection
Your umbrella policy can have a limit as high as you want, but that will lead to a higher premium you must pay each month. This is why the factors above are so important: After careful consideration, you can get all the protection you need without paying too much for an unnecessarily high limit.
How to Add Umbrella Insurance to Your Existing Policies
When you first began reading this guide, you had a simple question: “What does umbrella insurance cover?” Now that you know how useful it is, you probably have another question: “How can I add this protection to my existing policies?”
Mechanically, getting a new policy is as easy as calling your InsureOne agent and requesting it. But to maximize both your protection and your savings, you should consider bundling umbrella insurance with auto and home coverage.
Bundling Umbrella Insurance with Auto and Home Coverage
Bundling policies together is one of the best ways to save on your premiums each month. And it is very easy to bundle an umbrella policy with your existing auto and home coverage. Doing so means you will pay less than you otherwise would for separate policies, all while giving yourself some serious peace of mind.
Protect Your Family’s Future with Umbrella Insurance from InsureOne
Now you know about the benefits of umbrella insurance for families. This includes protecting you from lawsuits, protecting your future income, and protecting your family. But do you know where to find a carrier who is just as devoted as you are to protecting what is important?
Here at InsureOne, we specialize in protecting your future. And there is no better time to get started than today. When you are ready to give your family the protection they deserve, come get a quote online. You can also pick up the phone and give us a quick call at 800-836-2240. Finally, feel free to find an InsureOne office near you.
FAQs
Is Umbrella Insurance Expensive?
The average umbrella insurance policy is not expensive. Keep in mind, though, that the higher your limit, the higher your premium will be.
Can Umbrella Insurance Protect My Family from Lawsuits?
Umbrella policies cannot magically prevent you from getting sued. However, if you are sued and have to settle for more than your existing liability coverage, this policy will keep you from having to pay out-of-pocket expenses. Before taking out a policy, be sure to familiarize yourself with the most common liability claims.
Do I Need Umbrella Insurance If I Already Have Auto and Home Insurance?
Your existing auto and home policies each have liability limits that may not be sufficient if you are successfully sued. By bundling umbrella with those policies, though, you can maximize your protection in the event of a lawsuit.
How Quickly Does Umbrella Insurance Kick in After a Claim?
Umbrella policies typically pay out as soon as your current liability policies are exhausted.