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Figuring out how much and what insurance you need can be a daunting prospect. If you’ve ever purchased home insurance, you may have been asked if you would like an umbrella policy as part of your coverage. In order to get the best possible coverage and protect against unforeseen circumstances that may not be covered under a regular policy, it may be necessary to add additional liability insurance in the form of umbrella insurance to your car and home insurance policies to protect you and to protect your family.
Here’s why.
Protection from lawsuits
Kiplinger recommends that you have at least a $1 million umbrella policy to provide liability coverage in excess of your auto and homeowners insurance policies, even if you have less than $1 million in assets . If you are ever sued by someone and you do not have this umbrella policy, you could be responsible for paying legal fees from both current and future assets. Even if you eventually win the case, legal fees will still factor into the settlement because they add up so quickly. It’s wise to take out liability insurance limits that are as high as your net worth – more if you can afford it. This additional legal protection insurance covers the costs of defense as well as liability insurance for legal disputes that are not covered by your car or home insurance. More broadly, umbrella policies provide coverage in excess of your normal coverage, offering:
· Property Damage Liability
· Slander/slander
· Liability for injuries
· Attorneys’ Fees and Defense
You never know…
It is impossible to say if, when and who you will hurt in the future, be it from a car accident or any other scenario. Just think of this possible example: you injure a professional athlete, CEO or doctor. They may not be able to work for 10 years because of their injuries. They would be responsible for paying their lost wages, medical bills and compensation for pain and suffering, with lost wages alone starting at $3 million and going up from there, Bankrate says. It’s better to buy an umbrella policy with at least $1 million of coverage now than hold the bag in hand later. If something happens and you don’t have an umbrella policy, it will be too late to add one.
peace of mind
If you’re concerned about losing income and property because of potential litigation, you need an umbrella policy. Considered a smart buy in the insurance industry, this is one of those things that isn’t very exciting at first, like a new car or a vacation, but it gives you immense peace of mind knowing it’s there and when you had to use it it will protect you. Plan to pay between $150 and $200 for the first million dollars of coverage, then about $100 for each additional $1 million. Want to learn more about umbrella insurance? Contact us today to speak to a representative and learn how you can benefit!
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