Most people – whether they need one or not – are unsure what a personal umbrella policy is or what it covers. We will offer a brief explanation of a personal umbrella policy and how it may benefit and protect you financially.
When you’re outside and there is a light rain or breeze you generally don’t need or want an umbrella. However, if it is pouring heavy rain with severe winds, you definitely take your umbrella or wish you had taken it. An umbrella insurance policy works much the same way.
Personal umbrella insurance provides extra protection or limits above the liability insurance you currently have. Just as an umbrella protects you from heavy rain, an umbrella insurance policy protects you from losing the entirety of your wealth and assets in the event of a claim. Umbrella insurance can provide limits above your personal auto and home policies.
Most insurers will require a minimum of 250/500 or 300 combined single limit or a $500,000 single limit. The umbrella will be cover above those limits. Most often if you can purchase from your current insurer an umbrella is very affordable
Here is an example: Jane Doe – Smith falls asleep while driving and hits a van with a family inside. The accident results in $600,000 of medical bills, but Jane Doe – Smith’s auto policy has a $500,000 limit. Fortunately, She also has a $500,000 umbrella policy, and the additional $100,000 would be covered under the umbrella policy
It’s true that a personal umbrella may not be for everyone, but if you’re building financial resources for your future, are a professional, own your home, boat or recreation vehicle, you should consider an umbrella insurance policy. Having assets to lose makes you a target for attorneys and lawsuits – unfortunately. The added protection of an umbrella insurance policy is coverage no one should go without.
You should review your insurance periodically to ensure there are no gaps and that you are properly protected if something should happen. It doesn’t make sense to work hard all your life to have it taken away by some unfortunate circumstance. A solid financial plan should begin with an insurance review.
Umbrella insurance is generally very affordable – probably around $100-300 a year avg.
Please call the Minneapolis Insurance Team and allow us to give you a quote! 612.460.7796