Umbrella insurance may sound complicated, but it really isn't. In short, umbrella insurance offers additional liability insurance once your standard liability coverage for an auto policy or homeowners’ policy has been exhausted. An important benefit of umbrella insurance is that it covers not just the policyholder but also other household members. This means that if your teenage son or daughter is involved in an accident and deemed to be at fault, your umbrella insurance policy can help pay the costs of the injured person’s medical bills and even damages if you are sued.
When deciding if you need umbrella insurance, it can often determine your total assets or net worth. If your assets' total value to include your home, retirement accounts, investment accounts, savings, checking, college funds, and anything else, exceeds the limits of your auto or homeowner’s insurance liability coverage. Having an umbrella insurance policy makes sense because your assets are vulnerable in a lawsuit. Even if your net worth does not exceed your liability limits, umbrella insurance still makes sense - particularly in a world where lawsuits are becoming more prevalent. For example, if your homeowner’s insurance personal liability limit is $300,000 and you host a holiday party with twenty of your friends and neighbors only to have a winter storm the day off, and multiple people slip and fall on your ice walkway. In this situation, if one of the injured parties decides to sue for damages, and the case goes to court, the jury could award damages over $300,000. With umbrella insurance, you won’t be on the hook for having to find the funds to pay that difference.
At Fortified Insurance Partners in North Carolina, we understand that shopping for umbrella insurance can be complicated. Let us help you understand your policy options by giving our knowledgeable team a call today to learn more.
