Auto insurance and homeowners insurance policies can provide the financial assistance you need when there’s an accident or storm and damage results. But what happens if the price of having something fixed exceeds what your insurance provides?
This is where umbrella insurance kicks in. It serves as an extra layer of protection during situations in which you may be liable.
In legal situations, umbrella insurance can be a lifeline
Perhaps the best example of when umbrella insurance comes in handy is if you’re ever brought to court. As it is, auto insurance typically pays for the legal fees associated with putting on a defense if someone sues you for damages after an accident. It also potentially provides the compensation needed for reward settlements, but it may not always be sufficient.
Being sued may not seem like something you would ever have to deal with, but given the litigious nature of society, it may become reality.
For example, say you go out of town. Your son or daughter throws a party while you’re away and drinking is involved. A guest leaves the party and gets into a serious car accident. His or her parents decide to sue to pay for the medical bills, and the settlement is more than what your homeowners insurance provides. With an umbrella insurance policy, you’re less likely to pay out of pocket because the proceeds go over and above your standard policy’s maximum.
Perhaps you have a dog that in the course of play or after being startled, bites a neighbor or passerby while you’re out for a stroll. Dog bites account for more than one-third of all homeowners insurance liability claims, according to the Insurance Information Institute, with the average claim costing more than $33,000.
Generally, insurance should be enough to pay for the medical bills associated with treating a dog bite. If you’re sued, however, the penalty could be more. Once again, umbrella insurance helps protect you from financial ruin.
With Selective’s personal umbrella insurance you can expand your current liability protection in three ways:
- Broaden protection across all of your personal exposures, not just auto or home
- Increase coverage limits by adding an additional $1 million to $5 million in protection to your current policy limits
- Provide loss of earnings and defense costs in addition to your current policies for lost income, defense fees, court costs and other legal expenses arising from a hearing or trial
Talk with your insurance agent today about increasing your liability protection with a personal umbrella insurance policy.