You know the saying “when it rains, it pours?” Well, when things go wrong, you’re going to want some extra protection. And that’s where an umbrella policy comes in handy.
Lawsuits happen to everyone, not just wealthy people. If your means are modest, then you might be at an even higher risk. Take the following example of a middle class working man, who we will call “Jim”:
Jim has a wife and two kids, drives a modest car and lives in a modest house. As he drives home from work one day, he doesn’t notice that the car in front of him has come to a stop until its too late. Then WHAM, Jim has caused a car accident.
Jim doesn’t worry because he’s got a good auto insurance policy with $500,000 personal liability coverage. But as it turns out, the driver of the car is a surgeon and the surgeon injured his wrist in the accident. Now that surgeon is unable to do surgery because of this accident, the surgeon sues Jim. Jim looses the suit and is responsible for all damages. The lawyer fees come to over $150,000, the Mercedes the doctor was driving was $75,000, the medical bills amount to $50,000. No worries, right? His policy was for $500,000. Wrong!
Because the doctor was unable to work again, he sued for damages that came up to $1.5 million!
Not only did Jim have to sell his house and his car, he lost all of his retirement savings and the kids’ college fund.
If Jim had an umbrella insurance policy, he would’ve been protected.
Umbrella insurance policies can help protect you from losing your assets by providing an extra layer of protection. In Jim’s case, if he had an umbrella policy, then that policy would have paid out the damages over the $500,000. The worst part for Jim is that umbrella insurance policies are very affordable. Most $1 million umbrella insurance policies average $200 to $300 per year.
Most umbrella insurance policies have offer coverage of $1 million to $2 million, but it’s possible to get policies that cover up to $5 million, if needed.
Umbrella insurance policies cover the gaps not just on auto insurance policies, but also on homeowner’s insurance or renter’s insurance policies.
Contact us today and we can get you on an insurance plan that covers all of your assets and is affordable, too!