When Is Umbrella Insurance Necessary?

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Have you ever thought about your risk of being sued? The possibility is greater than most people think. Over 15 million civil cases are filed in the United States each year—that’s around one court case for every 20 people.

Don’t let this statistic scare you. There’s a way to protect your home, your family, and your bank account in the event of a lawsuit against you or someone in your household. Umbrella insurance is the best way to know you’ll be covered in case of a lawsuit.

What is umbrella insurance?

Think of umbrella insurance as an extension of any other insurance policy you hold. Should you need to file a home, auto, or different insurance claim, your umbrella insurance policy may step in when the primary policy runs out. For example, if your dog attacks a guest in your home, and they need $300,000 worth of medical treatment, you would be liable for the cost of their treatment. If you have liability coverage up to $250,000, your homeowner’s insurance may cover that amount.  An umbrella insurance policy may cover the final $50,000. Umbrella insurance saves you from incurring significant costs resulting from situations like these, in which you are legally at fault.

Who should have umbrella insurance?

The best way to decide if you need umbrella insurance is to think about the likelihood of you or someone in your family getting sued. A lawsuit will almost always happen when someone is at fault for a major car accident—over half of all civil court cases in the United States are related to motor vehicle crashes. You could also face a lawsuit if a guest or unwelcome stranger injures themselves on your property, even if you never deliberately caused them harm. Here are some questions to ask yourself to help determine your risk: 

 

  • How many vehicles and drivers are in the household?
  • How many drivers are under 21?
  • Do you/other drivers in your home tend to get in accidents?
  • How many properties do you own/rent?
  • Do you have a swimming pool?
  • Do you have a dog? What breed? Is he/she territorial?

Of course, you can never predict the future, and it’s always better to be safe rather than sorry, especially when you’re talking about risking thousands of dollars or more. Never bet on your attorney to save you either. It’s a good idea for everyone to have an umbrella insurance policy due to the high volume of civil court cases and the quality of public defense.

Is umbrella insurance worth the cost?

Typically, an umbrella policy costs between $150 and $300 annually for $1 million coverage. If that seems like a lot, consider the costs of a significant lawsuit. You could face a lawsuit or liability claim for much more than your homeowners or auto insurance covers. Regardless of how much money you have, you’d still be responsible for paying legal fees and any awarded damages. Wage garnishment, the withholding from your future paychecks to pay out damages owed, can happen if you’re unable to pay out-of-pocket. This can be detrimental, especially if you have a family to feed and support.  


Paying these costs out-of-pocket would be a tremendous financial strain on the vast majority of people, and it isn’t worth the risk to save a few hundred dollars a year. If you value your family’s security and peace of mind, an umbrella insurance policy is well worth the cost. 

If you’re ready to improve your family’s safety and well-being with an umbrella insurance policy, call a friendly Infinity Insurance agent today at 1-800-INFINITY or get a free quote online.

 

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