March is National Umbrella Month, a perfect time to talk about more than just rainy days—it’s also a great time to consider the importance of umbrella insurance in protecting your assets from financial downpours. Whether you own a home, drive a car, or have investments, an umbrella insurance policy provides critical liability protection when standard policies fall short.
What is Umbrella Insurance?
Umbrella insurance is an extra layer of liability coverage that goes beyond the limits of your homeowners, auto, or renters insurance. It helps protect your finances when you’re faced with lawsuits or high-cost claims that exceed the coverage provided by your primary policies.
For example, if you’re found at fault in a major car accident and the damages exceed your auto insurance policy limits, an umbrella policy can help cover the remaining costs instead of you paying out-of-pocket.
What is the Importance of Umbrella Insurance?
1. Protects You from Lawsuits
Lawsuits are more common than ever, and settlement costs can be financially devastating. According to the Insurance Information Institute (III), the average personal injury lawsuit costs around $54,000, but settlements can reach millions of dollars in severe cases.
2. Covers Large Liability Claims
Medical bills, legal fees, and property damages add up quickly. The National Safety Council reports that the average cost of a disabling injury in the U.S. exceeds $100,000. If your insurance policy’s liability limit is too low, you could be forced to pay the rest out of pocket.
3. Affordable Extra Coverage
One of the biggest myths about umbrella insurance is that it’s expensive. In reality, a $1 million umbrella policy typically costs between $150 and $300 per year, according to the III. That’s less than $1 per day for financial peace of mind.
4. Fills Gaps in Coverage
Standard insurance policies don’t always cover everything. Umbrella insurance extends protection to cover libel, slander, false arrest, and rental property liabilities—things your typical home or auto policy might exclude.
Who Needs Umbrella Insurance?
While anyone can benefit from umbrella coverage, it’s especially important if you:
- Own property or rental units
- Have significant savings or assets that could be at risk in a lawsuit
- Host guests or events at your home
- Own a dog, swimming pool, or trampoline, which increases liability risks (The CDC reports that nearly 8 million people suffer fall-related injuries annually, many occurring at home.)
- Have teenage drivers in your household (Teen drivers are three times more likely to be in a fatal crash, according to the CDC.)
Final Thoughts
Just as an umbrella shields you from the rain, umbrella insurance protects your financial future from unexpected legal and liability claims. As we celebrate National Umbrella Month, now is the perfect time to review your insurance policies and consider adding umbrella coverage for extra security.
Don’t wait for a financial storm to hit—be prepared with the right protection. Contact us today to explore affordable umbrella insurance options that fit your needs.