When planning on how to better protect your family and assets, it is imperative to consider your risks. Other states are not this way, but in California the courts have access to assets and income to appease judgments. An excellent way to ensure your protection is with an umbrella policy.
So, what is umbrella insurance and how can it better protect you? Umbrella insurance is additional liability insurance that will protect you financially, your assets, and your family if you are sued for a large amount of money. Auto and home policies have limits in terms of the dollar amount they will cover; these limits are agreed upon at the time you set and sign the policy and can often help to determine the price.
But limits are limits, and by definition carriers will not exceed them in their payouts. If you want fiscal protection against a large lawsuit, umbrella insurance is the way to go.
As you’ve likely gleaned by now, the term “umbrella” does not literally refer to the hand-held instrument that protects you from the rain. It’s a metaphor, referring to how the policy shields holders more broadly than does primary coverage.
Here are some examples where umbrella insurance might be in your best interest.
•Ever plan to host guests? If people are coming in and out of your home, there is a risk of someone slipping and/or falling and injuring himself. This is one of the major causes for big homeowners insurance claims.
•Use your car commuting to work, going to the store, or even just for a cruise down to the shore? The more time you spend in your vehicles the better your chance of a catastrophic accident.
In addition to covering you for accidents on your property or car accidents you are found to be at fault for, an umbrella policy can also protect your dependent children (for example, if your daughter causes a car accident), any accidents caused by you or your dependent children while operating a watercraft, accidents that occur on a rental property you own, and personal injury lawsuits arising from slander, libel, defamation of character, false arrest, detention or imprisonment, abuse of process, malicious prosecution, shock/mental anguish and more.
Umbrella coverage may seem like an extremely cautious step — insurance on top of insurance! For a few extra dollars each month, you can protect yourself from a catastrophic loss. Most policies cost only $20 – $30 a month, which is likely a small price to pay to further protect your most valuable material assets.