What is umbrella insurance and why do you need it?

You’re protecting your family with auto, home, and life insurance (if you know you need to), but is that enough? Eighteen21 columnist Jay Davis of COUNTRY Financial in Springfield explains that umbrella insurance protects your savings, future earnings, and other assets if you’re found responsible for another person’s injuries.

Umbrella insurance can cost you as little as $15 per month and provide $1 million or more in liability coverage. It also provides additional liability coverage over the policy limits of your auto or home policies, which helps you pay for damages you cause to a person’s property or injuries to other people, including their medical bills if an accident is your fault.

Here’s an example of how an umbrella policy can help protect your family; you are driving your son or daughter and his or her friends to a soccer game and on the way, you cause an auto accident and the injuries to others totals $600,000. You have auto insurance, but the total bodily injury limit is $500,000 leaving you $100,000 out of pocket. If you had umbrella insurance it could have covered the $100,000 that your auto policy didn’t and leave your savings intact.

Although the vast majority of umbrella insurance claims are auto-related the policy also applies if you’re renovating and your general contractor doesn’t have adequately vetted subcontractors for workers’ comp or liability. In the same vein, if you host a party and your guests get into an accident, believe it or not, the victim can come after you.

A personal liability umbrella policy is often an overlooked piece of a person’s insurance portfolio. If you have youth drivers at home, own a business, have a trampoline or pool or have a high net-worth, a personal umbrella policy is an absolute. Auto liability is the biggest exposure in a household and adding youth drivers to that household significantly increases the overall liability risk. The extra liability coverage, which acts as an umbrella over your current home and auto insurance assures that you are properly protected now and the future is guaranteed.

If you have any questions about umbrella insurance or would like to meet with Jay Davis of COUNTRY Financial get in touch on 217 698 3480 or email Jay.Davis@countryfinancial.com.