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The Importance of Umbrella Liability

Personal Lines

You’ve worked hard for your entire life to get to where you are today. However, with great reward comes great risk. Without the proper protection, you could be sued for more than you’re worth during a negative event.

Insurance doesn’t just cover the typical areas, i.e. homeowner’s insurance, auto insurance, etc. There are many different types of insurance that you can purchase in order to make sure that you, and the assets you have accumulated throughout your life, are covered. It’s nearly impossible to think of every situation that may put you in position in which you are financially liable. Instead, it’s best to purchase coverage that can apply under many different circumstances. To fill in the gaps that other coverages may leave exposed, we recommend umbrella liability coverage.

What is umbrella liability insurance?

Liability is a critical aspect of insurance. This coverage helps protect you from having to pay out of pocket for injuries and damages caused to others. When a claim is filed that is in excess of your existing homeowner’s, auto, or other personal coverage, umbrella liability can act as supplemental coverage for that claim. Umbrella liability insurance can cover not just you, but also other members of your family, so it is particularly useful if you have teenage or adult children still living in your home.

What can umbrella liability insurance cover?

There are a plethora of claims that umbrella liability can cover, but here are just a few hypothetical situations in which this coverage would be helpful:

  • You cause a multi-vehicle accident and your auto insurance policy doesn’t cover the cost of all damages and medical bills.
  • You’re sued and you need help paying for defense expenses.
  • You throw a party at your home and a partygoer causes an accident while intoxicated after leaving your event. In some states, you may be liable for part of the damages.
  • Neighborhood children are playing in your yard and one of them is injured while jumping on the trampoline.
  • Your dog bites another dog, or its owner.

How much umbrella liability coverage do I need?

We suggest purchasing limits that are at least equal to your net worth, keeping in mind what you can comfortably afford. Don’t risk a lot over a little. It’s not worth losing tens or hundreds of thousands of dollars if the difference in liability insurance limits would have cost you $100 per year to purchase a higher limit. Remember: you can be sued for more than your current net worth if you’re not properly covered. Claimants seeking damages can even take future earnings into consideration. It’s important that you protect yourself from judgements, liens or wage garnishments placed against your assets and future earnings.

Umbrella liability insurance can help protect you, your household, and your assets if a situation arises where you are held financially liable for a negative event.

Speak to your Private Client Group Account Executive for assistance obtaining umbrella liability insurance, getting a quote, and for additional information on what a policy can look like for you.

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