Warm weather has finally arrived here in Southern Massachusetts and that means that summer parties and events are going to be commonplace on the weekends! FINALLY! With these gatherings comes an element that many homeowners may not always consider, the safety of your guests and your responsibilities as a homeowner. Umbrella Insurance is within the realm of Personal Insurance and is an additional liability insurance that is in excess of other auto and homeowners policies.
Umbrella policies provide extra protection beyond standard coverage, and they are available in increments of millions. Most insurance companies offer these policies starting at $1 million and going up as high as $10 million in some cases. There are companies, like PURE, that target individuals with higher net worth ratings, and they offer policies as high as $50 million and sometimes more, products like those offered by PURE are available through our Private Client Group. The majority of people who buy Umbrella Insurance policies pick a standard $1 million policy, but there are quite a few who choose policies totaling $2 million. For the first $1 million, the premium can be as high as $250 per year. However, it may be higher if a person has more than two cars, has points on his or her record or has young drivers in the home. The premium lowers slightly for each additional million in coverage added.
If a person becomes liable for a catastrophic event, it is better for him or her to have more coverage. The best part about Umbrella Insurance is how affordable it is. Anyone who is considering buying this insurance should not cut any corners, it is crucial to carefully consider the value of all personal assets. When in doubt, aim for a higher number rather than a lower number. Some people think they only need to buy enough coverage to match their net worth, but this is not true. Many judgments and settlements can exceed a person’s assets. Keep in mind that awarded damages are not lowered due to a lower net worth.
Future wages should also be protected from garnishment. If a person does not have enough insurance, he or she can easily be compromised. When a person is injured and earns a sizable judgment, he or she can count on being a target of the top liability attorneys. While $1 million may seem like an excessive amount of coverage to some people, it is important to keep in mind that the total for a liability claim can multiply very quickly.
Settlements exceeding the $5 million mark are not uncommon to read about in the newspaper today. Facing a lifetime of medical care and injuries, coupled with losing the ability to earn an income can total well over $5 million. If multiple people are injured, the situation only becomes more complicated and more expensive. Every person should consider what he or she thinks is acceptable for different circumstances. People should ask themselves how much they would be willing to settle for if they were unable to work and were paralyzed for the rest of their lives. The best way to determine how much insurance to buy, is to discuss personal issues and concerns with one of our dedicated Personal Insurance agents.