If you have a source of income and assets/savings, you should purchase a personal umbrella insurance policy. One of the key reasons to have umbrella insurance is that if you lose a lawsuit, the legal settlement can wreak your current assets as well as your future income.
Here are five reasons why you need a personal umbrella insurance policy.
1. Claims Can Be Costly
If your auto and homeowners insurance coverages aren’t adequate, you’re vulnerable to immense risk. For instance, let’s take a look at your car insurance policy. Each state has set minimum liability requirements. The minimum coverage for drivers in California is $15,000 for the death or injury of one individual, $30,000 for the death or injury of two or more individuals, and $5,000 for property damage.
The minimum auto insurance coverage is inadequate. The cost of damage to a single building can easily exceed $5,000. The medical bills of a single person injured in an accident can exceed $15,000, particularly if the injuries necessitate surgery, long-term rehabilitation, and loss of income. Even if you stretch your policy to the high limit of $250,000, it can still be inadequate. A personal umbrella policy adds an extra layer of coverage not only to your auto insurance but also to your other personal liability policies.
2. You May Be Sued
Your dog may bite someone, or someone may be injured in your house, leading to a costly lawsuit. In such an event, your personal umbrella insurance policy would cover the resulting legal costs and damages. Take note that your umbrella insurance can also protect you against lawsuits such as libel and slander, which can be extremely expensive.
3. Protect Your Assets
Lawsuits and accidents happen even when you take all the precautions. You always need to be ready for the ensuing financial fallout. If a claim exceeds your insurance limit, you will be forced to pay the balance out-of-pocket. This can mean losing your savings and all assets. Umbrella insurance is an inexpensive way of ensuring that, even in the worst-case scenario, you won’t be financially devastated.
4. It’s Affordable
You can get a $1,000,000 umbrella insurance coverage for $150 to $300 annual premiums, according to Insurance Information Institute (III). The premiums are quite affordable and you’ll even get a better deal if you increase your limits.
5. Peace of Mind
Your car, your house, or other assets that may attract expensive lawsuits are supposed to be a source of joy, not worry. Umbrella insurance assures your assets will not be a source of financial devastation.
Unfortunate incidences can lead to expensive claims that could potentially cause you to lose your assets and savings. Umbrella insurance protects against such claims. At CF&P Insurance Brokers, we will help you find a personal umbrella policy that suits your needs. To get started, call (925) 956-7700 now.