Liability Coverage & Umbrella Policy Explained

Yes, you have insurance, but are you really protecting your assets?

You have seen the commercials being awarded $100,000 to $1,250,000 in lawsuits but don’t get fooled into thinking you are covered by the minimum insurance. 

Your insurance carrier will only pay up to your limits. So realistically, $15,000 in property damage won’t replace 68% of the cars on the road and $25,000 of liability coverage still leaves a gaping hole that could harm you  

So start protecting yourself today by understanding your liability coverage.

What is liability coverage?

Home & Auto: financial protection in the event that you or a member of your household are legally responsible for damage to another person or their property

What does it cover?

Home:

• Repairs for damaged property

• Medical expenses

• Cost of an attorney 

Auto:

• Bodily Injury (BI): you are legally responsible fo the injuries of another person

  • Medical expenses

  • Loss of wages 

  • Pain and suffering

• Property Damage (PD): you are legally responsible for damage to another person’s property

  • Vehicle repair

  • Repair to a damaged building or home

  • Repair to additional property such as a knocked down tree

What if I don’t have it?

If you are at fault you could have your Home or Condo, IRA’s, 401K’s, savings account or other properties taken from you.

How much should I buy?

Home: the minimum is $100,000 worth of liability insurance, but the recommended amount is $300,000 to $500,000 worth of liability coverage is.

Auto: As a general rule of thumb, subtract the actual cash value of the cash and assets you own minus your debt.

What is an Umbrella policy?

Umbrella policies provide coverage above and beyond what your liability insurance covers

Umbrella policies offer up to $1 million of protection ($25 – $35 per month for you)

*It’s well worth the investment of a few hundred dollars a year to save you potentially hundreds of thousands of dollars.  For many people, this can be accomplished by reducing the number of restaurant visits by only 2 per year! 

What does an Umbrella policy include?

• Bodily injury

• Property damage

• Personal injury

• Landlord liability

• Extended protection for members of your family

What is not included?

• Personal property

• Business losses

• Criminal actions

• contracts

Should I get an Umbrella Policy?

Yes, umbrella policies are very highly recommended for everyone. 

For those who have a total net worth (equity in your home, value of cars, jewelry, IRA’s, 401K, other properties and other savings accounts) above $250,000, the Umbrella policy is a must have.