What is an Umbrella Policy? … and Why You Need It
Greystone Insurance Associates, Inc. – Covering the Boone, Blowing Rock, Banner Elk, Watauga, Avery and Ashe Counties
Automobile insurance in Boone, NC is a necessity to protect against the costs of a car accident. Homeowners insurance helps families rebuild their lives and homes. An “Umbrella” policy is not as well known; however, anyone who owns a home or any assets should consider buying an Umbrella policy. It only takes a second to lose what you’ve spent a lifetime building or earned.
Most individuals think their broad policies will cover them in every circumstance. In fact, more often than not, your broad policies will leave you short-changed and searching for solutions if you are found negligent. Umbrella liability insurance covers you if you are held responsible for bodily injury, property damage, or personal injury. The limits of your policy will apply after the limits on a primary policy are exhausted. Also, an Umbrella policy offers primary coverage for losses not covered by other insurance in certain cases.
Typically, an Umbrella policy is sold in conjunction with Homeowner and Automobile coverage. Clients can add $1 million or more of liability insurance for a few hundred dollars per year. Multiple-policy discounts can also apply.
What does primary insurance pay for?
Liability insurance under Automobile and Homeowners policies pay expenses (for example – an injured person’s medical care, rehabilitation and lost wages) because the policyholder was at fault through negligent actions. Liability coverage also pays for the costs of defending against a claim or lawsuit.
What does Umbrella coverage do?
The Umbrella policy is a shield to protect an individual from having to tap into savings or sell assets to pay a judgment or claim. Intoxicated drivers leaving a party at your home, dog bites, or the neighbor’s child falling off the trampoline – all of these incidents can cause financial loss. Even lending a friend your ski/lake house for the weekend in the High Country of North Carolina can create a claim. A home-based business that requires visitors to come to your home may generate a loss. These losses might exceed (or be excluded from) primary insurance limits and coverages.
Who should consider an Umbrella policy?
Most homeowners should consider an Umbrella policy, but especially those active in community affairs, such as civic, charitable, and religious organizations. Even if a lawsuit is thrown out of court, you still must defend yourself. Umbrella liability coverage picks up these costs to the policy limit, whether or not a person is found liable.
Conversely, a person might face a damaging situation such as a false arrest or imprisonment, defamation, invasion of privacy, wrongful entry, eviction or malicious prosecution. Most will want to defend themselves but will face legal and other costs to do so. A Homeowners policy won’t cover it; an umbrella policy may cover it if there is a “drop down” feature.
How much is enough?
The amount of excess liability coverage that is right for you depends upon your personal financial situation. When selecting the appropriate amount of coverage, consider the following steps:
- Review all of your assets. This includes your house, automobiles, personal belongings and valuable collections, 401(k), investments, and even college funds for your children.
- Determine your risk factors. For example, long commutes to work, teen drivers in your household, number of residences owned, domestic employees (nannies, caretakers, etc.), any watercrafts owned, and online activities of household members.
- Consider the unknown. Who might a family member in your home hurt in a car accident? What would the lost wages and medical expenses be for a lifetime of critical care?
We do not want you to lose what you have spent a lifetime building. Contact Greystone Insurance in Boone, North Carolina to request an Umbrella proposal for complete asset protection. During these tough economic times, an Umbrella can provide you with the peace of mind to enjoy life!