Most people know they have to have car insurance, and most people who own a home also know they have to carry homeowners insurance. However, most people also do not know that there is an option for insurance that could cost them as little as two venti lattes a month to increase their liability protection by a million dollars!
An umbrella policy will increase your financial protection in rough situations.
You may not even be aware of how much liability you have on your home and auto policies. This is very important to know because if you are sued because of an accident or due to something on your property, you want to be sure you have enough insurance to cover it and not lose your home over it.
First Things First
The very first thing you want to do is pull out your home and auto policies (or look them up online) and find out your liability limits. This will be the maximum amount your insurance company will pay out in the event of injury or lawsuit of another party. If you own a home, you will not want anything less than $300,000 on either home or auto. $500,000 is even better, and probably won’t cost you much more.
What if You Want or Need More?
So you suddenly realize that with a teenage driver in your household and a swimming pool in the backyard that has become the neighborhood hang out, you
realize that it wouldn’t take much to reach the limits on your policy if something happened.
So Now What?
Now you need to call up your agent or insurance company that has your home and auto insurance and discuss a liability umbrella policy. If you do not have your home and auto policy together with the same company, now is the time to do that, too. You are losing money by having them with separate companies. Once you get your home and auto policy with the same company you will then want to ask about an umbrella liability.
What Is An Umbrella Insurance Policy Anyways?
Umbrella liability is much like it sounds. It is like a huge umbrella that is held over your home, your auto, and any other property you have insured. Most insurance companies offer one or two million dollars worth of protection.
Why Would I Need It?
For the two scenarios mentioned above, a teenage driver and a swimming pool, your risk factor for a large lawsuit is much higher than someone who has no children and no pool.
If your teenage driver were to run a stop sign and plow into someone, this is probably more likely to happen to him or her than it will to you. If they are driving when they are distracted, they may not even slow down a little bit, which causes much more likelihood of great injury and damage.
Swimming pools are hazards for children. They are wonderful to have for cooling off on a hot day, but when you have a pool, everyone wants to come visit. You have the potential for some less behaved neighborhood children to come sneaking in your yard without their parents knowledge and perhaps when you aren’t even home, which poses as a serious risk.
Even if you are carefully monitoring pool activities, something terrible could happen and you could be sued.
There are many other reasons to have more liability insurance. Talk to your agent or insurance company or do some quotes for it online. You will be amazed at how little a million extra dollars worth of coverage costs.
Image: Flickr.
