If you’re hit with a lawsuit, your auto or homeowner’s insurance may not fully cover you. Why?
Do you have a dog? How about a swimming pool or a trampoline? Do you have a lengthy commute?
If you responded yes to any of those prompts, you have an above-average risk of being sued. You are also more vulnerable if you have teen drivers at home, own numerous residences, hire domestic employees, are active on social media, coach a youth sports team or assist on a nonprofit council.
If you’re sued and deemed at fault for personal injury to others, your homeowners and auto insurance may not completely cover your liability. In these instances, the question, “Do I need an umbrella insurance policy,” becomes an easy one to answer.
If you get hit with a judgment, your home or auto policy will pay up to the limits of your liability coverage. If your insurance can’t cover the bill, your future profits, home, and other assets could be on the line for the difference. You can protect yourself with an umbrella policy, which attaches another layer of liability protection.
What is umbrella insurance?
An umbrella insurance policy normally covers similar items as home and auto policies, plus a few extras, including lawsuits that result from driving abroad, working rented watercraft, or from alleged libel, slander, or defamation of character.
Before a majority of insurers will sell you an umbrella policy, you need to buy your homeowners or auto policy from them and carry a minimum amount of liability coverage—typically $300,000 on your homeowner’s policy and, on your auto insurance, $250,000 for physical injury to one person and $500,000 per accident.
When you bundle your insurance with a single carrier, your coverage is less inclined to fall through the cracks if the specifications of the umbrella policy change. And if you get sued, you will have one set of defense lawyers for the whole case. Contrarily, agents recommend you to buy the umbrella policy from your auto insurer because most extensive lawsuits involve auto accidents.
If your current home or auto, the insurer refuses to sell you their umbrella policy—because your dog’s breed is reputed to have a bad claims history, for instance, or your family has had several fender benders—ask a Daigle & Travers Insurance agent to shop around for you with one of our stand-alone umbrella insurance carriers.
As a trusted advisor, Daigle & Travers Insurance understands the importance to create awareness about the impact of liability protection. Reach out to a member of the D&T team to start a conversation, this could mean the difference between experiencing a major financial loss or the peace of mind knowing that they are protected should an event occur.
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