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Protect Yourself with Umbrella Insurance

April 24, 2009 | Insurance | No Comments

With today’s litigious society where Americans love to sue each other, you may want to consider buying umbrella insurance that will give you additional liability protection above and beyond your current auto, homeowner and watercraft insurance.  

Every day we hear of lawyers being awarded large amounts of money and not to mention the numerous TV commercials by lawyers pitching their services to people injured in accidents .  Auto, homeowner and watercraft insurance policies have a limited liability (normally $100,000, $300,000, or $500,000).  What most people don’t know is if you have an accident and it’s your fault, the lawyers will come after your personal assets if your insurance don’t cover all the expenses.

For example, you have a car accident where it’s your fault and as a result a family of 4 is seriously injured.  If your auto insurance have a limited liability of $300,000 but the medical bills, lost wages, rehabilitative therapy, car repairs, legal defense, etc. end up being $500,000, you will be personally liable for $200,000.  The lawyers will seek to get this money from you.  If you have umbrella insurance then it will cover the $200,000.  Umbrella insurance is designed to kick-in when the liability on your other policies has been exhausted.

Almost every state in the U.S. hold drivers responsible for bodily injury and property damage resulting from auto accidents and the at fault driver can be sued for the damage. Personal assets from the at fault driver can be seized resulting from a lawsuit. Similar laws are also exists for home and watercraft owners.

Depending on the insurance company you can add an additional one to five million in liability protection for just a few hundred dollars per year.  The additional liability insurance is inexpensive when compared to the added coverage you will receive.


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