We all grow up learning to take responsibility for our actions. When we make mistakes, there are often consequences to pay – but at what cost? When it comes to accidental damages we cause to another person or their property; one mistake could quickly turn into a million-dollar lawsuit that your home or auto insurance falls short of being able to pay.
An umbrella policy is extra liability protection that supplements the coverage you already have. Though it is one of the most overlooked types of personal insurance coverage, having this important protection can fill in the gaps in your coverage, helping to shield you against a financial disaster.
What Can You be Sued For?
Technically, someone can sue you for nearly any loss that you could be directly or indirectly responsible for causing as a result of your negligence or the negligence of others within your household. For example, someone who trips over their shoelaces on a public walkway in front of your house might not successfully sue you for medical expenses. If they tripped over a water hose your child left draped across that walkway, they might have a case.
Everyone is at risk of being sued, and some people are at higher risk than others. Examples include people who:
- Have a long commute
- Own a swimming pool or trampoline
- Own one or more dogs
- Have high-risk drivers in their household (i.e. teen drivers)
- Host parties, gatherings, or overnight guests in their homes
- Are active or have teens who are active on social media
Judgments can reach the millions for major liabilities, such as property damages, injuries, disabilities, lost wages, and accidental death. You can also be sued for other damages, such as those caused by defamatory comments, which are typically covered by umbrella insurance but not by your homeowners, renters, or condo insurance. Even if you win your defense, you may be responsible for paying legal fees and court costs.
Selecting an Umbrella Policy
It is important to work with an independent agent here at Patriot Insurance before selecting any additional personal liability protection beyond what you already have. We can help you sort through the confusion surrounding umbrella coverage and assist in determining how much protection you might need.
For example, did you know that an umbrella policy is different from excess liability protection? The latter is loaded with restrictions and merely extends the limits on the coverage you already have. A true umbrella policy, on the other hand, will also broaden your coverage to include things like slander, libel, and false arrest.
To qualify for umbrella insurance, most issuers require a minimum amount of homeowners and auto liability:
- $300,000 or $500,000 homeowners liability
- $250,000/$500,000 auto bodily injury liability OR
- $300,000 combined single limit (CSL)
Once you meet those standards, extending your personal liability by $1 million is often as little as $200 per year or less. Additional coverage up to $5 million may be available at even more affordable rates – especially if you purchase your homeowners and umbrella insurance from the same carrier.
For more information about umbrella insurance or to request your free quotes, contact our office today.
What is your risk of being sued?
