You may have heard about umbrella insurance, but are wondering whether you need it. In this article we discuss what umbrella insurance is, who needs it, what it covers, and how much coverage you should opt for. Let’s get started!
1. What is Umbrella Insurance
Umbrella insurance gives you extra protection on top of your current insurance. You probably have a home, car, or even boat insurance policy, but they might not cover you to the level you need if someone sues you. That’s where umbrella insurance helps. It adds more coverage to protect your money, home, and other assets. You’ve worked hard to build these assets, and you don’t want to lose them! For a more indepth look at what Umbrella Insurance is, check out our previous article, “What is an Umbrella Insurance Policy?”.
2. Who Needs Umbrella Insurance?
Many people benefit from having umbrella insurance. Whether you have a swimming pool or joined a local charity’s board, you probably want to add this extra protection to your insurance lineup. Here are some examples of individuals who should definitely consider an umbrella policy:
- Landlords – You could be sued if a tenant or guest gets hurt on your property.
- Dog owners – Some dog breeds are more likely to bite, which could lead to a lawsuit.
- Athletes or sportsmen – Taking part in sports like skiing or shooting can cause accidents that hurt others.
- People who post reviews – Writing negative reviews online can lead to someone claiming you hurt their reputation.
- Homeowners with pools or trampolines – These things can cause injuries, even if it’s not your fault.
- Board members – If the group or company you help run gets sued, you could be personally sued too.
- People with lots of savings or property – If you’re sued, you have more for someone to try to take.
As you can see, an umbrella insurance policy helps protect a variety of individuals. You may not have realized how your lifestyle opens you up to lawsuits or accidents.
3. What Does Umbrella Insurance Cover?
Umbrella insurance covers you when someone sues you for a significant amount of money. It can also protect you in situations your regular home, car, or boat insurance doesn’t cover.
Examples of What Umbrella Insurance Covers:
- Property damage you cause
- Injuries or medical bills for others
- Certain types of lawsuits
- Personal liability, like saying or writing something that hurts someone’s reputation (libel or slander)
Example of Umbrella Insurance for Car Accidents:
You’re in a car accident and found to be at fault. The other driver has a serious injury and sues you for $500,000. Your car insurance only covers $300,000. Umbrella insurance helps pay the extra $200,000 so you don’t have to use your savings.
4. How Much Coverage Do I Need?
Now that you understand the importance of umbrella insurance, you need to know how much coverage to sign up for! Primarily, you need to calculate your total asset worth. This way, if someone sues you, you can recover potential lost assets. Here are some factors to help you consider the amount needed:
- How much cash do you have in the bank?
- What is your home worth?
- What are your vehicles worth including cars, boats, and motorcycles?
- How much are your investments worth?
- Do you have valuable property, such as expensive jewelery? Add that in too!
Be sure to discuss coverage with your insurance agent. They may have other suggestions and things to consider when tallying up your assets.
Umbrella Insurance with Ianniello Agency
We hope these answers helped you understand umbrella insurance and whether you need it! Most people will benefit from adding an umbrella insurance policy once they have accumulated significant assets. At Ianniello Agency, we make it easy to add an Umbrella Policy to your insurance arsenal. We’re here to guide you through the process with ease. Request a quote online or give us a call today to get started!
