Accidents happen. The worst occurs when you least expect it, and accidents are not always within your control. Unfortunately, these accidents can cost you millions, whether or not you have that kind of cash lying around. Personal umbrella insurance is designed to pick up the slack when other insurance policies fail to cover full damages.
In most cases, personal umbrella insurance is attached to car and homeowner’s insurance. If someone is injured in your home or if you are at fault in a car accident, the respective policies will pay out for damages up to the limits you’ve set for those policies. If the damages exceed those limits, personal umbrella insurance is a good thing to have.
According to MSN Money, personal umbrella insurance is neither too expensive nor too extravagant for the average driver or homeowner. There are plenty of ways to secure a good deal on this type of coverage, and it only makes sense in today’s litigious society.
In many cases, it is not the actual damages which push accident lawsuits into the millions, but punitive damages. This means that if someone is injured at your home or in a car accident that you caused, they might sue you for pain and suffering in the millions. For example, if your car insurance carries liability coverage up to $500,000 and someone sues you for $1 million, you will be liable for the extra $500,000 unless you have personal umbrella insurance.
MSN Money recommends purchasing as much personal umbrella insurance as possible. Most insurance companies offer coverage in $1 million increments from $1 to $5 million. If you want to protect your safety (and your bank account), buying $5 million worth of insurance is not a bad idea.
It is also important to consider your lifestyle when deciding whether or not to purchase personal umbrella insurance. For example, if you operate a home-based business, you might be at more risk than someone who does not. This is because you likely have a constant stream of visitors (employees, vendors, customers) who might be injured on your property.
The same is true for people with jobs that require significant travel. A salesman who drives all over the state to visit with customers, for example, spends much time on the road and runs a greater risk of getting into an accident than someone who works from home and rarely drives.
Talk with your insurance agent about personal umbrella insurance. You might discover that the premiums are insignificant compared to the peace of mind this type of coverage offers, and it might be in your best interests to purchase a policy.