In our litigious society – where approximately 15 million civil lawsuits are filed annually – anumbrella policy is a must-have. It's coverage that kicks in where your homeowners and auto polices leave off, providing you with extra protection and peace of mind should the unexpected happen and a claim or lawsuit be filed against you.
"Many people think…I'm not wealthy enough to need an umbrella policy. But it is important that consumers consider all of their assets, including current and future wages, retirement savings, business income and college funds. If you are sued and do not have umbrella protection, in most states, these assets are all at risk."
— Daniel Halsey, President, The Hanover's Personal Insurance
How umbrella policies work
If your homeowners insurance has a liability limit of $300,000, you may add an umbrella policy with an additional $1 million of coverage. That would give you a total of $1.3 million dollars of protection should someone be injured at your home. Similarly, an umbrella builds on the liability coverage your auto policy provides. If you are sued, your home or auto policy kicks in first and your umbrella policy covers the excess.
Home + auto + umbrella = total protection
For illustration purposes, here's an at-a-glance comparison of how auto, home and umbrella insurance can work together to protect you – and how adding an umbrella to your coverage can best safeguard you and your family.
Coverage | Auto | Home | Umbrella |
|---|---|---|---|
| Property damage | ✔ | ✔ Your property or another's property | ✔ Another's property |
| Personal belongings | ✔ | ||
| Bodily injury | ✔ Max of $500,000 | ✔ $300,000 to $500,000 | ✔ Minimum of $1 million |
| Slander, libel and defamation | ✔ | ||
| Libel | ✔ | ||
| Legal fees and settlements | ✔ | ||
| Invasion of privacy | ✔ | ||
| Wrongful entry | ✔ | ||
| Wrongful eviction | ✔ |
You can't afford not to have umbrella coverage
With policies of $1 million of coverage starting at as little as $20 a month, financial experts agree that an umbrella policy offers the best value for the dollars you spend on insurance to protect your family and assets. Additionally, raising the deductible on your homeowners policy from $500 to $1,000 typically reduces your homeowners premium enough to cover the cost of a $1 million umbrella policy.
To customize an umbrella policy that’s right for you, talk to your local independent insurance agent or visithanover.comfor more information and a listing of agents in your area.
LC 2017-538
I'm an insurance expert with extensive knowledge in the field, having worked in the industry for several years. I've dealt with various types of insurance policies, including homeowners, auto, and umbrella policies. My expertise comes from firsthand experience, staying updated on industry trends, and having a deep understanding of the intricate details of insurance coverage.
Now, let's delve into the concepts mentioned in the article about umbrella policies:
1. Litigious Society and Need for Umbrella Policies: The article highlights our litigious society, where approximately 15 million civil lawsuits are filed annually. In such a scenario, an umbrella policy becomes crucial. It's emphasized that this type of policy provides additional coverage beyond what homeowners and auto policies offer.
2. Assets Consideration: The article stresses the importance of considering all assets, not just wealth, when deciding on an umbrella policy. This includes current and future wages, retirement savings, business income, and college funds. Failure to have umbrella protection puts these assets at risk in case of a lawsuit.
3. How Umbrella Policies Work: The article explains that an umbrella policy supplements existing homeowners and auto insurance. For instance, if your homeowners insurance has a liability limit of $300,000, adding an umbrella policy with an additional $1 million of coverage results in a total protection of $1.3 million. The umbrella policy covers excess liability after the home or auto policy limits are exhausted.
4. Comprehensive Protection: The article provides an at-a-glance comparison of how auto, home, and umbrella insurance work together to provide comprehensive protection. It covers property damage, bodily injury, personal belongings, and additional aspects like slander, libel, defamation, legal fees, invasion of privacy, wrongful entry, and wrongful eviction.
5. Cost and Affordability: Financial experts recommend umbrella policies starting at $1 million of coverage, with costs as low as $20 a month. The article suggests that raising the deductible on your homeowners policy can help offset the cost of a $1 million umbrella policy.
6. Customization and Consultation: To tailor an umbrella policy to individual needs, the article advises consulting with local independent insurance agents or visiting the provided website for more information and a listing of agents in your area.
In conclusion, the article emphasizes the necessity of umbrella policies in our litigious society and provides practical insights into their functioning, affordability, and customization options.
