- Firm Overview
- Practice Areas
- Family Law Victories
- Personal Injury Victories
- Info Center
Consider the following scenarios: Your garage door (which you knew was creaky) crushed your friend’s foot and ankle; your chimney fell onto your neighbor; or your daughter’s friend fell into your empty pool.
The common problem: The possibility of a lawsuit seeking damages that exceed your homeowner’s policy limits. The solution: An Umbrella Insurance Policy. Simply stated, an umbrella insurance policy is extra insurance. It provides coverage over and above what your home and auto policies offer.
Imagine this scenario: You are the cause of a car accident that results in substantial injuries to the other driver. While you are insured for $250,000, but because of the severity of her injuries, the other driver sues and obtains a jury verdict for 1 Million Dollars. Your home, income and money in the bank would all be at risk.
While panic would be certainly consume your thoughts, there is a way to avoid financial ruin. If you had planned ahead and purchased an umbrella policy, your home, income and savings would not be at jeopardy. You would be able to sleep, knowing that your family’s financial future was not in jeopardy.
People in need of an umbrella policy generally fall into one of two categories:
The first group includes High Net Worth individuals (or families). Many insurers advise that if your net worth (that is – the value of what you own minus your debt) is roughly $1,000,000, then it is advisable to obtain umbrella coverage. I think the better idea is to obtain umbrella coverage when your net worth is over just a few hundred thousand dollars. Why the difference? Perhaps because the insurers recommending umbrella policies for $1,000,000 net worth individuals have a financial interest in passing some of the risk onto the policy owner.
The second group includes people with certain risk factors. I’m not talking about high cholesterol or a job as a tightrope walker. People that drive a high number of miles for their job, or people with a pool in their backyard are examples of individuals with increased risk factors. Pools are the cause of a high number of devastating injuries, and having a pool is reason alone to obtain an umbrella policy. Other backyard dangers, such as debris or landscape features increase your risk as well.
So now you’re thinking, “OK, but how much is this going to cost me?” Well, the answer might surprise you. First, you must realize that you can only obtain such a policy if you have the highest liability limits offered by your primary auto and home insurance companies. Assuming that you do, the cost is not as high as you might expect. Usually, umbrella policies are offered in increments of $1,000,000, up to $5,000,000, and the cost is less than you pay on your underlying policy, and may even be as low as $200 annually.
This cost is minimal when you realize that it may save your family’s financial stability. The benefit is that you do not need one umbrella policy for your home and another for your car. One umbrella policy is all that is required to provide coverage for any personal liability issue. Our DuPage personal injury attorneys encourage everyone to consider the peace of mind umbrella coverage provides.