Why You Need Umbrella Insurance

Our clients often ask us about umbrella insurance. It works as a secondary insurance which protects your personal liability after other policy limits have been exhausted. If you own any sizable assets, it is a good idea to check into purchasing umbrella insurance.

Car accidents are one of the most common scenarios where this coverage comes into play. If you get into a serious accident with a school bus, and you are at fault in the accident, you may be responsible for the medical expenses of many children. Most auto liability policies only cover the first $300,000 or so in liability expenses, and this is not going to be enough if many people are injured in the accident.

A judge could determine you are responsible for millions of dollars in medical bills, which is enough money to wipe out the assets of most people. You may have to sell a home, run up credit cards, or ultimately declare bankruptcy if you don’t have the money to cover a large judgement against you.

Do you have sizable assets? Here are a few questions to ask:

Are you a homeowner?
For most people, your home is your most valuable asset. Once you have equity in your home, this asset can be targeted if you are found liable for someone else’s medical bills.

Do you have sizable retirement assets?
Your retirement accounts could be targeted if you have to pay out a large sum of money to cover medical expenses that exceed the liability coverage of your auto policy or homeowner’s policy.

Do you own other assets?
Maybe you inherited land from a deceased relative. Maybe you own a boat or additional automobiles. Maybe you have a side business generating significant income. All of these assets could be at risk in a major lawsuit judgement rendered against you.

To learn more about the options available, contact Sanford Insurance today.