Home insurance is often treated as a one-size-fits-all product. But a majority of homeowners don’t have the right insurance to meet their needs. Almost two-thirds of homeowners don’t have enough homeowner’s insurance, while 27% of homes are underinsured. When it comes to underinsured properties, a common culprit is a lack of liability insurance, which is often covered in an umbrella insurance policy.
What’s covered in an umbrella policy?
- Bodily injury
- Personal injury
- Property damage
- Landlord liability
What is an umbrella policy?
Umbrella insurance offers liability protection that goes above and beyond your homeowners and automobile insurance, which is particularly helpful if you get sued. In addition to covering liabilities, umbrella coverage also covers property damage when your homeowners policy is exhausted.
You may think your current homeowners and automobile insurance already offers great protection. But the umbrella policy goes above and beyond what standard policies cover. If you own property and have other assets you want to protect (savings and investments), an umbrella policy is a smart and cost-effective way to shield the life you have built. Compared to other homeowners insurance products, an umbrella policy is inexpensive, so you can gain peace of mind from protection without breaking the bank.
How much coverage do you get with umbrella insurance?
Most umbrella policies provide $1 million of coverage for a few hundred dollars a year. Coverage applies to all family members as well as liabilities that occur on and off the property. For the cost, umbrella protection provides broad coverage for a wide range of incidents.
Who should get an umbrella policy?
The biggest question people have about an umbrella policy is, do we need it? The best starting place is evaluating where you are in life. In a worst-case scenario, what’s at stake?
If you’ve owned a home for a few years and started a nest egg, an umbrella policy is worth considering. If someone gets hurt on your property, or you’re involved in a vehicle collision, your auto and homeowners liability policy may not go far enough to protect your assets. That’s particularly true if your liability goes beyond the maximum stated in your policy. Not only that, but a jury can hold you responsible for additional damages in an injury lawsuit, such as lost wages or pain and suffering, which are things your umbrella policy can cover.
You should consider an umbrella policy if you:
- own property
- have cash savings and investments
- are a landlord
- own a trampoline or in-ground swimming pool, or some other feature that has the potential for injury
- own a dog (dogs bite but they can also knock people over)
- take part in sports or activities with a heightened risk of injury to others (whether you’re a direct participant or a coach)
When would you need umbrella insurance?
If someone trips on a crack on your sidewalk and shatters their wrist, that person might file a claim against your homeowners policy to pay for their medical care. If it’s a bad break, and the person requires surgery and physical therapy, their costs could easily exceed your liability coverage in your homeowners policy. That’s where your umbrella policy provides coverage.
Have a look your homeowners and automobile insurance policies. You’ll see the maximum payout in the event of property damage or bodily injury. These amounts can seem like enough funds to cover whatever life throws your way. But things like inflation and a judgment in a lawsuit (i.e., lost wages and other factors) can easily exceed your coverage. If your homeowners policy has $300,000 of liability coverage, but a court judgment comes to $500,000, you’re on the hook for $200,000. That’s life-changing for most.
Make an appointment with an independent insurance agent at Minnwest Insurance Agency today to evaluate your current coverage, and help you compare rates from numerous insurance companies, so you can get the best value for yourself and your whole family.
Call or meet with an independent insurance agent at Minnwest Bank today!
Minnwest Insurance Agency, Inc is an affiliate of Minnwest Bank. Products offered through Minnwest Insurance Agency, Inc are: Not a deposit | Not FDIC insured | Not insured by any federal government agency | Not guaranteed by the bank or an affiliate of the bank | May go down in value (if applicable)