Umbrellas protect more than just "fun in the sun"

Your Saturday afternoon football party was a good way to watch your favorite college football team and enjoy your friends- until Joe- your next door neighbor, feel down the stairs and was badly injured.  Now you're faced with a lawsuit- and the possibility of paying a large settlement.

Times have changed- not only wealthy people have to worry about lawsuits.  If a jury finds you liable for someone else's injuries, your homeowners insurance may not cover the entire award, and you may have to pay the price regardless of your financial circumstance.

Consider your friend, Joe, above.  If your homeowners insurance provides $100,000 liability coverage and Joe is awarded $200,000, the remaining $100,000 will have to come from your own pocket- unless you have a personal "umbrella" policy.

An umbrella policy is referred to as "excess insurance," because it supplements the liability coverage in your auto and homeowners policies.  For example, your homeowners would still pay $100,000 toward Joe's $200,000 claim, but the remaining $100,000 would come from the umbrella policy.  Umbrella coverage generally ranges from $1 to $5 million.  The annual premium for a million dollar policy averages less than $200.

The amount of your premium also depends on other factors.  For example, insurance companies consider whether you have an office on the premises; other dwellings (in addition to your home) to be covered; if you own more than two cars; and whether you own a recreational vehicle, motorcycle, motor home or boat.

Even more protection

In addition to increasing your current personal liability limits, an umbrella policy can provide primary coverage not included in your auto or homeowners insurance.  For example, if you are named in a suit involving libel, slander or false arrest, your umbrella policy will provide the coverage you need.  Some policies also cover you if you're sued for assault and battery, fright, humiliation, loss of services, discrimination or punitive damages.

Know what your coverage includes

Because umbrella policies cover so many different risks, it's important to make sure you're getting the best coverage and value for your money.  Consider these points when choosing an umbrella policy:

• Be sure you know exactly what risks are covered.
• Make sure all the people you want or need covered are covered, including everyone on your auto or homeowners policies.
• Be certain you're covered if a suit is brought against you anywhere in the world.  Some policies will limit coverage to the U.S. and Canada.  World wide coverage is a good idea if you travel.
• Check to determine if and how defense costs are handled under your umbrella policy.  They can be considered part of the policy amount or paid for regardless of the policy limit.

Proper protection provides you peace of mind.  We'd like to help you choose the right coverage for your auto and home.  Please call us to discuss what is best for you!

(Article taken from 1996 SAFECO)