3-minute read
Most people understand the importance of home and auto insurance, but many don’t realize that these policies have limits. If you’re involved in a major accident or lawsuit, those limits might not be enough to protect your assets. That’s where umbrella insurance comes in.
What Is Umbrella Insurance?
Umbrella insurance is extra liability coverage that extends beyond the limits of your home, auto, or other standard policies. It kicks in when the damages or legal costs exceed what your primary insurance covers, helping protect your savings, home, and future income.
Why Do You Need It?
1. Lawsuits Are Expensive
We live in a litigious society, and lawsuits can happen to anyone. If someone slips and falls on your property, you’re at fault in a major car accident, or your teenager posts something defamatory online, you could face a lawsuit demanding hundreds of thousands — or even millions — of dollars. Without umbrella coverage, you’d have to pay out of pocket once your primary insurance reaches its limit.
2. Accidents Happen
If you’re at fault in an accident that injures multiple people or damages multiple vehicles, the costs could quickly exceed your auto liability limits. Similarly, if your dog bites someone or your child accidentally injures another child, umbrella insurance can help cover medical and legal expenses.
3. Your Assets and Future Income Are at Risk
Without umbrella coverage, a large lawsuit could put your home, savings, and even future wages at risk. Courts can garnish wages if you’re unable to pay a judgment, which could impact your financial security for years.
4. It Covers More Than Just You
Umbrella insurance often covers your spouse, children, and other household members, offering broad protection against liability claims that may not be covered by other policies.
Final Thoughts
Umbrella insurance isn’t just for the wealthy — it’s for anyone who wants to protect their hard-earned assets from unexpected risks. For a relatively low cost, it provides a crucial financial safety net, ensuring that a single accident or lawsuit doesn’t lead to financial ruin. If you have a home, car, or any savings, an umbrella policy is a smart investment in your financial security.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. For more information, visit our website or call 877-440-3304.
This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.