News

When – and Why – You May Need Umbrella Insurance

Living in a busy world, our lives constantly intersect with the people around us, and some interactions can have surprising consequences. It is increasingly important to make careful insurance choices to protect yourself from the unexpected. Because, even if you carry excellent coverage with high limits, situations may arise that could leave you liable for costly damages exceeding what your policy will cover.

This is where umbrella insurance comes in. An umbrella policy sits over other policies, such as home insurance, auto, boat, etc., and provides additional liability coverage if the underlying policy is exhausted during a claim. Here are a few cases when an umbrella policy is essential:

1. Passenger Injuries Driving around with friends, it can be easy to get distracted and go a little too fast. If an accident occurs and passengers are seriously injured, medical expenses can add up quickly – potentially totaling more than what an auto policy would cover. Without an umbrella policy, any liability expenses beyond the auto policy limits may be the driver’s responsibility.  
2. Social Media Mishap With so much communication happening on social media, conversations with friends are now in the public eye. Picture a teenager getting angry at a teacher – no stretch of the imagination there – and venting online. Depending on what’s said, the teacher may decide to sue the student’s family for personal injury after the blow to his/her reputation. Cases like these have paid more than half a million dollars, far beyond the standard liability limit on a home policy. An umbrella policy may step in to cover the rest of the claim.  
3. Dog Bites the Neighbor Responsible dog owners take the time to train and socialize their pets. However, even breeds that aren’t typically associated with aggressive behavior can suddenly act out, despite our best efforts. If a pet badly injures a neighbor, between medical bills and future disability, the cost can go into the millions. Most home insurance policies top off at less than $500,000 in liability coverage, leaving a huge gap.  
4. Faulty Furnace Being a landlord is tricky business. Even with the most responsible management, rental properties can be a minefield of possible claims. If a furnace starts malfunctioning, a tenant may sue for brain damage caused by carbon monoxide poisoning. While all landlords should maintain their property and make repairs as needed, having a safety net in case of a major liability claim is equally important.

While most people don’t stop to think about everything that could possibly go wrong, insurance professionals very often see the worst case scenarios, such as the examples above. I know they sound like horror stories, but, trust me, they can be a lot worse if you don’t have enough coverage in place. So, work with your independent agent to select the proper insurance you need to protect yourself and your family from these and many other tragic scenarios.