Has Your Situation Changed Since You Last Considered A Personal Umbrella Insurance Policy?

One of the most underutilized and least expensive policies designed for families is the personal umbrella insurance policy.  This happens because most insurance buyers are usually more focused on reducing premiums than they are on buying asset protection.  Also, many insurance agents just don’t make this an important part of their coverage discussion when talking with their personal insurance clients.   And even if you don’t feel that you need this policy today, that doesn’t mean that you shouldn’t revisit the idea from time to time.  The truth is that over time, most families will be in or pass through a time where a personal umbrella insurance policy makes a lot of sense for them.

Let’s take a quick look at what a personal umbrella policy is designed to do for you. These policies are designed to increase the protection that you already have on your homeowners insurance policy and your auto insurance policy. They can also add a layer of liability protection to other policies you might have like boat insurance, motorcycle insurance or RV insurance.     Usually they start with a minimum liability limit of $1,000,000 but you can usually purchase limits on up to $5 million or more if you need it.

Where you live can have a lot to do with your risk factors.  Anyone living near metropolitan areas or areas where there are more wealthy people are at greater risk of being the target of a lawsuit.  To make matters worse, the poor economic environment of the recent past has also increased the number of people who are willing to sue you if the opportunity presents itself.  If you cause an accident and injure someone who has recently lost his or her job, or who may feel that his or her job is not secure, then you are now dealing with someone who has good reason to hire an attorney to try and get as much as they can from you while they have a chance.

The need for a personal umbrella policy also changes for most families over time.  This is due to a gradual increase in asset exposure over time as well as the sometimes temporary but very real changes in risk exposure.   Let’s look at these two phenomenon one at a time.

Asset exposure simply refers to the increase in value of your assets over time that give you something to loose and that make you a richer target for litigation.   Most kids out of college have very few assets to lose.  This is often a time in life when they select their auto insurance and perhaps even home insurance agent.  They may reject the notion of an umbrella policy then because they really don’t have much to lose.  But over time as they aquire retirement accounts, pay down the house mortgage and build up savings, these same people now have a different asset exposure.  If they don’t make a change to their insurance portfolio and purchase an umbrella policy, then they risk losing it all to one bad accident.   Buying an umbrella policy for a few hundred dollars a year would be a much better choice for them than leaving all of their hard earned assets at risk to the greed of an injury attorney and his client.

Increased risk exposure can also slip into a family’s life literally overnight.  The best example of this is the day your teenager gets his or her license.  Now you have a driver with very little experience out on the roads,  driving a car titled in your name and all of your assets are now on the line if they make a mistake.  Imagine your 16 year old reading a text while hurtling down the highway at 70 miles per hour.  This little scenario could really change your financial situation for the rest of your life if you haven’t prepared for it with an umbrella policy.  The day my oldest child turned sixteen, I doubled the amount of coverage  on my personal umbrella policy.

At Clinard Insurance Group we want all insurance buyers to be informed consumers.   We insure thousands of families all across North Carolina, helping them keep their assets safe.   If your personal insurance portfolio does not include a personal umbrella policy, then please call our office today at 877-687-7557.  We will be happy to help you analyze your needs and help you find the umbrella policy that leaves you with a feeling of comfort about the safety of your hard earned assets.