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We live in a litigious society, which is hardly breaking news. We carry insurance to at least mitigate some of the expenses association with accidents, whether we are at fault or not. If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgements against you and your attorney’s fees.
Your insurance coverage is only as broad as your policy limits. For example, if you have 100/300/50 limits on your auto insurance, you are covered for $100k per person up to $300k per occurrence with $50k in property damage. You may want to have an extra layer of liability protection. That’s what a personal umbrella liability policy provides. An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander, according to the Insurance Information Institute (www.iii.org).
Think about this: Say you have auto insurance with 100/300/50 limits. That means your coverage maxes out at $100k per person up to $300k per occurrence with $50k in property damage. You pay for anything over that amount. With million dollar lawsuits commonly becoming million dollar settlements, you may want to consider an umbrella policy.
Large settlements are not limited to auto insurance, either. A Daily Finance (www.dailyfinance.com) column pointed out that “although 85 percent of umbrella insurance claims are related to car accidents, the policies offer protection against accidents that occur at your home, too — for example, in case someone falls down your stairs and sues you, or your balcony collapses during a party. Many people opt for an umbrella policy because they have a pool or a trampoline on their property and fear the consequences of a child getting injured.”
Talk with your insurance professional to see what options are available for you. A $1 million umbrella policy is not as much as you might think. Protecting your assets, current and future, is something you may want to consider.