Most Americans buy insurance to provide protection against the loss of personal property. The most common types of insurance are our homeowners, renters and auto insurance policies. After all, most of us spend a lifetime filling our homes and autos with possessions that we have purchased with our hard earned money, and the last thing that anyone wants is to lose these possessions to a major event. So if that major event happens are we doing enough to really protect ourselves?
Nowadays, accidents can run in the hundreds of thousands—in some cases millions of dollars—and if you are not adequately protected, you will have to pay the difference out of pocket. If you cannot pay the difference, you could be forced to sell the home your children grew up in, your wages could be garnished or you may have to liquidate all of your assets to pay for a lawsuit. Your current insurance policy will only cover up to a specified amount listed in the policy, anything in excess of those limits is out of your pocket.
Other than the policies mentioned above, we have other options to protect our family’s financial well-being. A personal umbrella policy provides excess liability limits to all personal assets such as autos, recreational vehicles, homes and rental properties. Coverage can be purchased in million-dollar increments and range from $1 million to $5 or $10 million
So, how do you determine whether or not you need a personal umbrella policy? Below are three circumstances and if any apply to your household, you run a much higher risk of being sued and should consider whether or not the advantages of an umbrella policy are right for you.
1. Do you own a swimming pool?
In most states, the law states that you are responsible for anyone that comes onto your property whether they are invited or uninvited. For example, if you are at work or out of town and someone trespasses onto your property and drowns in your pool, the family of those who trespassed can sue you. On a hot summer day people, especially young children, are eager to jump into a pool. What is to say that pool will not be yours?
2. Do you have a young driver in your household?
Studies show that 14% of all deaths in motor vehicle accidents are from teen drivers. If your teenage daughter or son were involved in a car accident and seriously injured, or killed, another driver and his or her passengers, it would result in paid damages to each person affected. If the injured person is a surgeon or other skilled professional and were paralyzed or disabled, you as the legal guardian would likely have to pay for medical bills and lost wages. If the seriously injured or killed individuals were considered very valuable in their company, you could face additional lawsuits. Now think of whether or not your current insurance policy would pay hundreds of thousands if not millions in such a case?
3. Do you own a personal watercraft?
Just like an automobile, teenagers are also very dangerous on personal watercrafts. Nearly 40% of injuries that occur on personal watercrafts are caused by teenagers 19 years old or younger.
These are just a few of the exposures that need to be considered when contemplating the purchase of a personal umbrella. Thankfully, personal umbrella insurance is fairly inexpensive and worth every penny considering the broad coverage and peace of mind that it provides. You have worked hard for what you have, so do not let it be taken away from you in lawsuits, garnishment of wages or liquidation of your assets.
Contact Henssler Norton Insurance and we will help you evaluate your lawsuit risk and determine whether or not a personal umbrella is right for you. After all, there is no insurance policy to prevent accidents, but the assurance of an umbrella policy can ensure your peace of mind.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
