You may have been asked by your insurance agent if you were interested in an Umbrella policy. Here is a great article that couldn’t say it any better, The importance of an Umbrella Policy*, by Cheryl Costa:

Umbrella policies pick up where your homeowner and automobile policies leave off. For example, if you are in a car accident and your auto policy provides $500,000 in coverage but someone suffers a debilitating injury in the accident, you could be sued for much more than $500,000. If that happens, all of your financial assets would be at risk. – Read the full article here.

Umbrella policies little known facts:

• You are covered for defense costs and attorney fees associated with claims against you that are covered by your Personal Umbrella policy, but not by your primary policies. These expenses are usually paid in addition to your policy limit – ask your insurance agent to be sure.
• Most Umbrella’s do not cover you for excess UM/UIM coverage – which can be very critical! Make sure your policy does cover you for UM/UIM by checking with your insurance agent.
  • Uninsured/Underinsured Motorist Coverage: You know that you have insurance coverage but what about the “other guy”? What if the other guy doesn’t have enough insurance? Uninsured/Underinsured Motorist Coverage, protects you from the “other guy” and those other variables.

Here are some scenarios:

Careful isn’t always careful enough…

• Tori and Bob’s landlord, Shelley, had an outdoor barbecue that wasn’t being used. They offered to pay additional rent and relocate it.
• During the move, the straps broke and the grill spilled onto the highway. Nearly 20 cars were involved, but no one was injured.
• Minutes later, Brianna, an expert motorcyclist, slowed to carefully scan for debris when a part of the grill became entangled in her tires. Flying over the handlebars, she broke her neck and was left paralyzed.
• Tori, Bob and Shelley were responsible.

Claim: $5 million

Chef can’t cook…

• Chef Ida, head of a household of three, was stopped in her car when Ted sideswiped her, resulting in a serious injury that left her without the use of her wrist.
• Ted’s state-required auto insurance was not nearly enough for the multiple surgeries needed, so Ida’s personal umbrella policy with Underinsured Motorist coverage kicked in. Even after the procedures, Ida was not able to continue her career as a chef, resulting in loss of future earnings.
• Ted was responsible but underinsured, so Ida’s policy took over.

Claim: $1 million (On Ida’s UM/UIM portion of her Umbrella)

Tragedy on familiar ground.

• Frank’s family’s lakeside cabin was always filled with guests during the summer.
• One afternoon, Frank made good on a promise to the kids and took them around the lake on a water tube, towed by his boat.
• Growing up on the lake, he knew the waters well. As he rounded a familiar turn, a newly-extended dock was directly in his way, so he veered quickly, but the tube whipped around and hit the dock, killing three children and catastrophically injuring the rest.
• Frank was responsible.

Claim: $10 million

If you have any questions or need a quote for your umbrella, we’d be happy to help! Give us a call at 303-773-9998 and let us know you came across this article. Or feel free to leave your information in our contact form.

*Article direct link: http://www.boston.com/business/personalfinance/managingyourmoney/archives/2012/05/the_importance_1.html