Do you know your risk of being sued? One thing is for sure – it’s not zero. Anyone can be sued in today’s litigious society, and some people are at greater risk than others. Certain factors can increase your exposure to potential liability, such as having a dog, owning a swimming pool, having a teenage driver, and hosting guests in your home.
If someone is injured or experiences a loss on your property or as the result of an accident caused by you, your child, or your pet, you could be held financially liable. If you were to face a major lawsuit, would you have enough personal liability coverage to protect you against financial loss?
How Much Liability Insurance Do You Need?
Chances are you have liability insurance through your homeowners and auto insurance policies. Unfortunately, the limits in these types of policies are sometimes too little to cover your full liability. In fact, personal liability is the most underinsured area for the average American according to independent insurance advisors. In many cases, it is not enough to carry home and auto liability; you need umbrella insurance, too.
Umbrella insurance is high-limit personal liability coverage that provides added coverage above and beyond that which is covered in your primary liability policies. It kicks in once the limits on your homeowners or auto insurance have been exhausted, protecting you against exorbitant out-of-pocket costs.
Imagine being sued for $1 million but only having $500,000 in primary coverage. Without umbrella insurance, a court could pursue your savings, investments, physical assets, income, and future wages to satisfy the judgment.
Umbrella insurance might be right for you if any of the following factors apply to you:
- You have a high net worth
- You expect to receive a future inheritance
- You have assets you wish to protect
- You have future income-earning potential
Based on the above list, nearly everyone can benefit from umbrella insurance, especially considering liability judgments can easily reach into the millions. If you are ever sued, your homeowners or auto insurance will pay for property damages, bodily injuries, and legal expenses up to the limits of your policy. Once exhausted, your umbrella insurance begins to pay, shielding you from out-of-pocket liability.
In some cases, umbrella insurance may even provide coverage not offered by your homeowners or auto insurance. A true umbrella policy – not just ‘extended liability coverage’ – will also typically offer coverage for libel, slander, false arrest, and damages you cause while traveling abroad.
Purchasing Umbrella Insurance
Fortunately, umbrella insurance is very affordable and easily attainable for the average family. A $1 million policy is usually just $200 or less per year, and coverage tends to become even more affordable with increased limits. Furthermore, our independent agent team here at Philleo Agency Insurance can help clients find added savings by offering discounts for umbrella and homeowners insurance purchased from the same carrier.
To qualify for coverage, most carriers will require that the limits on your auto and home liability meet certain requirements.
These are typically:
- $300,000 or $500,000 homeowners liability
- $250,000/$500,000 auto bodily injury liability OR
- $300,000 combined single limit (CSL)
If your current liability coverage does not meet the requirements of your umbrella insurance carrier, we can help you raise your limits. Give us a call to speak with one of our friendly team members today.
Do you know your risk of being sued?
