Crooners Perry Como and Bing Crosby both recorded a song called “Let a Smile Be Your Umbrella (On a Rainy, Rainy Day).” And while that’s good advice for remaining optimistic, you need much more than a smile to protect you from our litigious society. You need an umbrella insurance policy.
While an umbrella policy is not intended to protect you against claims related to showers, it does offer protection for the proverbial “rainy day.” In simple terms, an umbrella policy offers coverage above and beyond normal limits on home, auto and personal watercraft policies.
Umbrella insurance offers additional liability protection, beginning at $1 million. While that seems like an excessive amount of insurance, a settlement of that amount is not unusual in the event of bodily injury, property damage or death, in addition to legal fees.
Don’t think it could happen to you? Think again. Here are two real-life examples.
- A teenager is driving home late at night with a friend. He falls asleep at the wheel, hits a tree and his friend is seriously injured, requiring numerous surgeries, a month of hospitalization and six months of rehabilitation and therapy.
- You’ve invited the neighbors over for a Fourth of July celebration. After burgers and a few beers, your new neighbor decides to climb onto your stone retaining wall. He falls off while dancing, and sues you for damages related to his medical expenses – two broken legs and a ruptured spleen – and lost work time.
Umbrella insurance pays after a policy’s standard liability limits are exhausted. Without an umbrella policy, it would not be usual for an individual determined at fault in a serious accident to lose his home, vehicle and any other personal assets.
An umbrella policy insures all policies underneath it. For example, if the insured carries an auto insurance policy with liability limits of $500,000 and a homeowners policy with a limit of $300,000, then adds a $1 million dollar umbrella, the insured’s limits become in effect, $1,500,000 on an auto liability claim and $1,300,000 on a homeowners liability claim.
Surprisingly, an umbrella policy is relatively inexpensive – about $200 annually for $1 million liability limit in conjunction with standard policies covering two automobiles and a home.
While you might decide you don’t need an umbrella to weather a spring shower, most everyone can benefit from the peace of mind of an umbrella policy. Call an Allen Tate Insurance Agent today, and keep that smile in the event a storm comes into your life.
By Robin Price (Vice President of Sales, Insurance)