Regardless of which insurance company you’re insured with, even the best car insurance has limits to the amount of liability insurance you can purchase. If you have substantial assets to protect, that may not be enough, additional liability insurance should be considered with either excess liability insurance or an umbrella policy.
While there are differences, excess liability and umbrella insurance offer an extra layer of liability protection in addition to the policy limits on their underlying auto and homeowners insurance. Not surprisingly, many people believe they have sufficient liability coverage in case of an auto accident or if somebody gets hurt at his or her home. The fact is, however, if you are sued for damages and a verdict is rendered for an amount in excess of your underlying policy limits, you’re personally responsible for the excess amount. In the case of the most severe accidents, the excess amount can easily be hundreds of thousands of dollars or more. That’s why umbrella insurance is a wise choice when designing a comprehensive insurance program.
Why We Recommend Umbrella Insurance
Accidents can happen to anyone, including you. Imagine this: you’re driving down the road, and your phone vibrates. You look to see what it is, and it’s already too late. You’ve crossed the center line and hit a car with a family of four. Or you’re having guests over for a friendly get-together, a guest slips on a wet spot on your ceramic tile floor, hits their head violently on the counter, and suffers a traumatic brain injury. In both of these examples, your life and the families of others have changed in a blink of an eye.
Most umbrella coverage claims arise from motor vehicle accidents. However, the coverage is there regardless of what causes a loss. It could be an accident in your home, on your boat, while riding a motorcycle, or driving down the highway. Depending on the insurer, umbrella insurance might even cover you for things you never thought of like:
- A motor vehicle accident in another country
- Boat or jet ski rental while on vacation
- Defamation
- Abuse of process
- False arrest
Don’t think that just because you don’t have a large sum of money to lose, you don’t need umbrella insurance. If a hefty judgment is made against you, your retirement fund, investments, personal property, bank accounts and even your future earnings can all be garnished. Anybody with a job, home and a family should strongly consider an umbrella policy. Without one, you’re placing your family at risk too.
Do I Qualify for an Umbrella Policy?
The only real prerequisite to getting umbrella coverage is that you maintain a certain amount of liability coverage on your auto and homeowners policies. Those might be $250,000 on your auto liability with $100,000 of property damage and $300,000 on your homeowners liability.
How Much Does Umbrella Coverage Cost?
It’s actually quite affordable. With a good claims history, you should be able to purchase a $1 million umbrella policy for around $250 a year. You can also add an additional coverage for about$100 per million.
The Bottom Line
Anybody can be found negligent for an accident and get sued. The basis of a bodily injury or property damage suit can result from a momentary distraction on the road or an unforeseen and unpreventable accident at your home.
Unfortunately, even the best car insurance isn’t always enough in the case of a big verdict. We think you’re better safe than sorry. You can call us for your affordable umbrella insurance at 480-820-2020, or just use our online contact form. We’ll do our very best to make sure you have the best possible protection at a fair price.
Imes Insurance Associates, Inc., is an independently owned insurance agency located in Mesa, in the center of the East Valley area of metropolitan Phoenix. We fully service individuals, families and businesses in the greater Phoenix area with auto, home, life and business insurance from more than 20 different insurance companies.
