What is Umbrella Insurance and Why is It Important When I’m Retired?
In our previous post, we discussed that there’s definitely a rising cost of living here in Prescott. There are several things driving our city’s growth: growing population, increased housing developments, and rising minimum wage. We’ve got a huge retirement community here in our beautiful town, and many are enjoying the fruits of their labor.
An average retiree has their house paid off, a good nest egg of cash in the bank, and perhaps a car or two. About 10-15 years ago, the best limits you could get were 100/300/100. Today, you can go as high as $500K in coverage, and add an umbrella to protect your assets beyond home and auto insurance.
Think of umbrella insurance as extra liability insurance. This type of policy protects you from major claims and lawsuits, and as a result, it helps protect your assets in the future in two ways:
- Provides supplemental liability coverage beyond the limits of your homeowners, auto, and boat insurance policies. Umbrella insurance kicks in when the liability on these other policies have been exhausted.
- Provides coverage for claims that are excluded from other liability policies including: false arrest, libel, slander, and liability coverage on rental units you own.
Umbrella insurance also provides coverage for things like:
Bodily Injuries
Your umbrella policy will cover medical bills and litigation expenses sustained from bodily injury claims. Here are some examples of situations that can be outside of your standard homeowners and auto coverage:
- Your dog decides to bite a visitor or the gardener
- You’re at fault for a car accident
- A guest falls on your property and requires medical attention
- A neighbor’s child falls and hurts themselves while playing in your yard
Property Damage
If there is damage that occurs to your property, or other people’s property, umbrella insurance is the supplemental insurance that can help in situations like:
- If you’re at fault for a car accident where there’s damage done to the other driver’s vehicle and their property
- If your dog decides to shred up your friend’s priceless Persian rug
- Accidental damage to school property caused by your child
Rental Unit Owners
As a landlord, you face a lot of challenges. But perhaps one of the scariest is the possibility of being held accountable for accidents or things that occur when you’re not around. If someone trips over a crack in driveway of your rental property and decides to sue you for damages, your umbrella insurance coverage will protect you. If your tenant’s dog bites someone and you’re being held responsible for the injuries, umbrella insurance will also help cover the cost of these liability claims.
You’ve worked hard for your money and deserve to keep it protected against even the most unpredictable situations that standard homeowners and auto insurance policies won’t cover. If you haven’t discussed umbrella insurance with your insurance agent, now is the time to start. Give us a call today to learn how umbrella insurance can help protect your hard earned money.