SHOULD YOU BE UNDER AN UMBRELLA?

Maybe you have all the coverage you need. Homeowners policy at the max, auto policy way above the mandated minimum. But then something unexpected happens and you are on the hook for anything beyond the limits. It can happen, and if you have property and other assets, that’s the first place the plaintiff’s attorney(s) will go.

Consider this article from an article in Daily Finance (www.dailyfinance.com): You may be assuming that if you don’t have $1 million to lose, you don’t need an umbrella policy. Unfortunately, if you are sued by someone who falls down the stairs at your home or whom you injure in a car accident, you can be sued for more than just what you have in the bank.

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).

Your retirement funds, investments, savings and even your future earnings are at risk if a judge allows someone to garnish your wages to pay off a settlement. In some states, the equity in your home can be part of the judgment and you would be forced to sell your home to pay someone who sues you.

The fact is that we live in a litigious society. That is news to nobody. So if you have something to lose, you need to protect it. Umbrella policies are way less money than you think. It is worth your time to talk about adding extra coverage, just in case. Don’t wait until it’s too late.