Lawsuits aren’t just for businesses and big corporations; individuals can be sued, too. You likely have liability insurance that protects you against your major risks, such as car insurance liability when you are at-fault for a collision or homeowner’s liability when someone is injured in your home. Though these policies serve as your first-line of protection, what happens when they are not enough to cover the damages and legal fees after a lawsuit? Could you afford to pay tens or even hundreds of thousands of dollars in excess damages out of your own pocket? With a personal umbrella insurance policy, you can rest assured that you are well-protected against potential litigation if the damages exceed the limits of your primary coverage.
Understanding Umbrella Insurance
Umbrella policies are supplemental liability policies that provide flexible secondary coverage when your car insurance, home insurance, renters insurance, or other qualified primary liability protection falls short of your needs. You do not need a separate umbrella policy for each type of coverage; rather, a single umbrella insurance policy can extend coverage for several different types of liability. It can even cover damages for some types of liability that may not be covered by other types of policies.
Examples of umbrella insurance liability coverage uses include:
- Third-party injuries in your home or on your property
- At-fault car accidents
- Third-party property damages
- Damages to a rental boat
- Third-party property damages and injuries while traveling abroad
- Libel, slander, and defamation
- And more
Most umbrella policies provide at least $1 million in excess liability coverage, although higher limits are often available in million-dollar increments. An agent here at Anton Insurance can help you explore coverage limit options and determine how much umbrella protection may be right for you.
Keep in mind that umbrella insurance does not cover your personal losses and injuries or any liability you acquire as the result of a willful, criminal, or intentional act.
Should You Purchase Umbrella Insurance?
Umbrella insurance is not just for wealthy people with high incomes, expensive assets, and large bank accounts. If you are sued, victims can pursue compensation from your personal savings as well as years of future income. That could be enough to derail your plans for retirement, vacations, or buying the dream home you have been saving for.
Imagine, for example, a middle-income family with $500,000 in total liability for each of their car insurance and home insurance policies. The family assumes this is enough to cover them against potential damages until their teen driver causes an accident that results in a fatality. The family is sued for $1.5 million, of which car insurance only covers one-third. The remaining million dollars of damages is still the family’s financial responsibility, which forces the liquidation of assets and plunges them into bankruptcy. Had they purchased an umbrella insurance policy, the remaining damages would have been covered in full.
We generally recommend umbrella insurance to individuals and families that:
- Expect to receive a future inheritance (even small to moderate sums)
- Expect to earn an income for many years to come
- Expect increased wages in future years
- Plan to work into retirement
- Have valuable assets
- Have investments
- Have money set aside for college or retirement
- Own a home or investment properties
- Own high-risk belongings, such as swimming pools or a trampoline
- And more
Purchasing Wisconsin Umbrella Insurance
Since umbrella insurance policies pay benefits once you exhaust the limits on your primary coverage, most insurers require a minimum amount of primary liability protection on your car, home, and renters insurance before issuing an umbrella policy. However, umbrella insurance comes in a stand-alone policy – not as ‘add-on’ coverage to your primary insurance policies. The coverage generally remains effective so long as you pay premiums and meet the requirements of the policy, which usually contain contingencies based on the limits of your primary insurance coverage.
Although maintaining high limits on your primary liability policies could raise the cost of your car and home insurance premiums, these are generally offset by the low cost of umbrella insurance, which usually costs just $150 to $300 per year for a million dollars of coverage. Additional umbrella coverage is often available for even less – sometimes as little as $75 for each additional $1 million in protection. Not to mention, working with an independent agent here at Anton Insurance can help you secure competitive rates and discounts on your primary coverage, minimizing your costs without sacrificing the quality of your coverage.
Selecting Your Umbrella Insurance Coverage
Umbrella coverage typically starts at a minimum of $1 million, with as much as $5 million or more available from many insurers. As with all insurance policies, we recommend choosing your limits carefully based on your actual risk factors and needs. Here at Anton Insurance, we can help you explore your options with consideration for your income, future income, assets, and budget. If your umbrella insurance company requires you to increase the limits of your primary liability coverage, we can help with that, too.
To find out more about Wisconsin umbrella insurance options and how an independent agent can help you save on the high-limit liability protection you need, contact our office to speak with an agent and request your personalized free quotes. A small investment could be the very thing that protects your family against financial calamity and preserves your income and wealth for years to come.