Great question. Oftentimes, just the fact that you are asking it makes me lean towards “yes”. I don’t often get asked this by 20 year olds who just moved out, are driving a 30 year old car and living on their buddy's 'couch. If you are thinking about protecting your assets, you probably have assets, and that’s a good start.
To begin, let’s talk about what Umbrella Insurance is.
An umbrella policy is EXTRA liability protection, above and beyond the liability protection already provided by what are called the “underlying policies”… typically your home and auto.
For example, lets pretend your home already has the typical $300,000 of liability protection built in. If your dog runs off and bites somebody and they sue you for $100,000,then you’re fine. The home policy has enough coverage. But, if they sue you for $500,000, now you could personally be exposed for $200,000. That’s where an umbrella policy would kick in... if you had one.
Who needs an umbrella policy?
Typically, I’m looking for two big things: risks and assets.
In terms of assets, I don’t typically have all the facts. Clients don’t often call me and tell me how much they have in their bank account or 401k. But I can see what is often your biggest asset, your home (or homes!) Based on what kind of home you have (and whether you have a mortgage), I can typically get an idea of whether or not this may be a good fit. If I can determine you have assets, I’m certain that a billboard attorney can. And he’s gonna come looking for them!
In terms of risks, what things do you have that would make you a little more likely to get sued than the average joe? Swimming pool? Boat? Teenage drivers? Rental properties? In our litigious world we live in, anybody could be sued for anything. But having one or more of these risks in your home does make you a larger target. I like to tell parents, imagine that your daughter is driving around with your entire 401k in her trunk. And if she makes one mistake, the whole thing could blow away.
If you have risks AND assets, then you should probably consider an Umbrella. If you have risks AND assets, you definitely should.
Do you have questions that this post didn’t address? I’d love to help you. Just give me a call at 615-861-2201 and we can discuss all of your insurance needs.
