Don’t get caught without an UMBRELLA? Why would anyone need UMBRELLA INSURANCE of 1,000,000 or more?

I am finding that Insurance is a funny thing. No-one likes paying premiums, but everyone is sure glad they have insurance when something bad happens.

I have been suggesting to all of my clients the need for an umbrella policy. Normally, when I suggest it — I get the crinkled nose and the side-ways glance with the question “how much?” Then a really quick “no thanks.” Followed by — “I already pay enough for insurance!”

That may be true — but many of us are at risk and we are cheeky about how much exposure we actually have. Here are some examples — including a link to a New York Times Article about Umbrella Policies.

In this sue happy environment, there are many scenarios where one might be taken to court for more than $100,000 or even $1,000,000. One of the most likely events is to be at fault in a car accident. Medical costs alone can exceed $100,000 per person. Now imagine if there were 2, 4, or even 6 people in the car. Imagine if some of them were children. Here is one example from a NY Times article on umbrella policies:

One of Mr. Cox’s clients crashed into the rear of a car on a slick highway. A woman and a child were critically injured. After two years of litigation, his client settled the lawsuit for more than $5 million. The client had $15 million in umbrella coverage. The policy paid for the settlement and all legal costs. “Without the umbrella,” Mr. Cox said, “they would have been completely wiped out.”

We really don’t think about all the things that can happen that will exceed our liability limits like:

Your child gets into a fight at school and injures another student; 
You write a comment on Facebook and get sued for defamation;
You hire a handyman to clean gutters and he falls and seriously injures himself;
Your dog bites someone; and
There are plenty of real life examples where even minor fender-benders turn into multi-million dollar claims!

The right umbrella amount depends on where you live, your profession and your aversion to risk. Liability coverage in home and auto policies rarely exceeds $500,000, yet 13% of personal injury liability awards and settlements are $1 million or more, according to the report, citing data from Jury Verdict Research. The amount of coverage you choose should bear some relation to your net worth. But note: if you’re worth $1 million, a $1 million umbrella is not going to protect you from a $2 million legal judgment, since it would still be worth a lawyer’s time to go after your personal assets. So even if your net worth is below $2 million, you should consider a $2 million umbrella.

Don’t skimp on coverage. Coverage at least equal to your current net worth is the typical recommendation. However, if coverage falls short, a judge could order you to pay up, liquidating savings and investments (retirement plans and trusts are usually safe), real estate and personal property — and even garnishing your wages. Consider adding coverage to equal the present value of your employment income stream.

In most cases, personal umbrella policies are available in million-dollar increments, from $1 to $5 million. While an umbrella policy is not required, it may offer increased protection in the unfortunate event of an accident.

No one likes to discuss insurance — however we can all agree it is a relief after an accident when you hear an agent say — “your covered.”

If you want to know more about Umbrella policies or simply have a question about your personal insurance be sure to call me at 440–527–0304 or via email at I would love to hear from you!