Why You Need a Personal Umbrella Policy

January 20th, 2017 by admin

Many people never think about insurance until they need it. That’s the way insurance is supposed to work. But sometimes your existing liability coverage is insufficient for your needs. This can happen if you entertain in your home, have a business in your home , if you volunteer at school or in sports, or if you have an automobile, a swimming pool, or a boat, as well as in countless other situations. That is where personal umbrella policies come into play. They provide coverage that goes above and beyond the limits of your existing liability coverage to fill in gaps that may exist if you’re ever involved in a lawsuit.

Umbrella Coverage and Your Auto Policy

Chances are that if you have automobile insurance, you have some degree of liability coverage included in your policy. This is certainly the case if you meet your state’s minimum coverage requirements.

However, if you only have the minimum coverage – or if your coverage doesn’t go far beyond the required liability coverage, you could find yourself in a situation where the judgment against you exceeds your liability coverage. In fact, with skyrocketing medical costs and chain reaction accidents becoming commonplace, that could happen quite easily.

Your legal fees in an accident involving multiple plaintiffs alone could exceed the total of your coverage without even addressing the costs of medical care and other awards made against you. You could be on the hook for all those additional costs.

That is why it is so important for you to make the investment in your personal financial security by purchasing a personal umbrella policy. But it is not the only reason.

Beyond Auto Liability

It’s not all about auto insurance, though. The beautiful thing about an umbrella liability coverage policy is that it isn’t limited to your car – at least not for the most part.  An umbrella policy offers additional liability protection that goes beyond the basic liability coverage you have for your home, your boat, your ATVs, etc.

This means that if your deck comes crashing down in the middle of a party and people are injured, your umbrella coverage will kick in once the liability coverage on your homeowner’s policy has been exhausted. From that point, your coverage will continue until the limits of your umbrella coverage is exhausted. It is the ultimate safety net for all your liability coverage needs.

Additionally, your umbrella policy offers protection that isn’t available with an auto policy or a homeowner’s policy. This protection extends to claims of defamation, liability, slander, or false arrest, which includes social media posts. These things are covered by most umbrella policies – as well as the legal fees of defending yourself against these charges.

Why is an Umbrella Liability Necessary Today?

In the past, it wasn’t as important to have additional liability protection. Today, though, the economy is still in what feels like a perpetual state of recovery. Unfortunately, troubled economic times almost always coincide with higher instances of lawsuits related to injuries. Bigger lawsuits and more frequent lawsuits almost always correspond with difficult economic times. This means that you’re more likely to get sued when accidents occur than you would be during less volatile economic times.

Since your liability coverage – and umbrella liability protection – covers the costs related to your legal representation as well as the potential judgments against you, it isn’t necessary to live in fear of how much a rigorous defense will cost. Your liability protection covers your legal expenses whether you are determined to be at fault in the accident or injury or are absolved of responsibility.

Buying personal umbrella insurance coverage offers protection that far exceeds what your standard liability coverage policies allow. In today’s litigious world, it is one of the most important financial investments you can make for yourself and your family.

At Insurance Center of North Jersey, our goal is to ensure that you have the information you need to make informed decisions about insurance, including a personal umbrella policy. Please email us at info@icnj.com or call us at 201-525-1100 or for more information.