Umbrella Insurance – When Is It Necessary?

 In Insurance Advice, Financial Planning, Tips

Umbrella Insurance – When Is It Necessary?

First of all, what is umbrella insurance?

An umbrella liability policy covers a much higher limit and goes above and beyond claims directly relating to your home and auto.

An umbrella insurance policy protects an individual or family against unforeseen events in which they are held responsible. This means it protects from being sued for damage to other people or property. It covers a much higher liability limit above and beyond claims directly relating to your home and auto. It also aids in the prevention of being sued for damages beyond what your current policies already cover. Some examples of damages covered include: bodily injury, property damage, legal fees, and court costs.

How does it work? 

An umbrella policy will pay damages if the insured or their immediate family member is involved in a lawsuit. The price of an umbrella policy will range depending on how much coverage is provided. Most insureds purchase a policy to cover between 1 and 5 million dollars. To figure up how much coverage you will need compare your asset level to your risk and consult an insurance agent.

Things to consider if you’re questioning if you should get an umbrella policy: 

How much risk do you have? Do you have rental properties? Do you have an attractive nuisance, such as a swimming pool or trampoline? Teenagers on your insurance? Are you a business owner? All of these things could potentially raise your risk level for a lawsuit. Other factors include occupation, pets, hobbies, driving record, travel and previous lawsuits. As you can tell there are a lot of factors an average person may not think are risky.  It is important to consider your assets and risks along with your personal lifestyle to see if an umbrella policy is appropriate for your situation.

Ways to save with an umbrella policy: 

  1. Choose a higher deductible. This can help to save on premiums.
  2. Compare multiple insurance quotes. It is always a good idea to shop around for different options.
  3. Bundle your insurance. Most of the time carrying your home and auto policies along with your umbrella policy with the same company will lower the premium.

Umbrella insurance isn’t required by law but it protects the insureds financial position.  It is essentially a safety net for assets and your future and “it is better to have it and not need it than to need it and not have it.” Sometimes things happen unexpectedly and an umbrella policy will provide protection you might not know you will ever need.

For a quote on an umbrella policy for your family give us a call at 417-882-1800 or click here.

We are not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation. We are able to provide you with information but not guidance or advice related to federal benefits. Our firm is not affiliated with the U.S. government or any governmental agency. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and The Resource Center are not affiliated companies. AW12175556

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