Umbrella insurance is financial default protection. The purpose is to increase your insurance if the claim exceeds the limits of your auto, homeowner, and similar insurance.
The initial limit starts at $1 million and increases in million dollar increments. To qualify for an umbrella policy, your primary policy must meet certain requirements.
Why do I need an umbrella?
If they are found liable for unpaid bills or exceeding certain policy limits, umbrella insurance can provide the necessary support to protect your money and your finances.
Here is an example. During a short drive, your child runs a red light and starts a $100,000 Range Rover driven by an oral surgeon. The man and his mother are also in the car.
Although your son escaped unscathed, all three occupants of the Range Rover were seriously injured.
The Range Rover needs $40,000 in repairs, and the victim’s compensation is $210,000. The surgeon also sues you for $250,000 (and wins) because his severely broken arm kept him out of work for six months.
All told, you owe $500,000 plus attorney’s fees, but your auto insurance limit is $300,000.
Thanks to your umbrella, the $200,000+ difference is out of your pocket.
Am I at high risk?
Although not required by law, umbrella coverage is very important for every individual and family regardless of the cost. You don’t have to be a millionaire to be treated like one.
If the following applies to you, it is recommended that you keep umbrellas and adjust as your products or risks increase:
- You have property
- You have an inexperienced driver in your home
- You have a lot of savings, cash, or other assets
- You have things that often lead to personal injury lawsuits, such as swimming pools, trampolines, guns, or dogs.
- You teach children’s sports
- You usually have parties at your house
- You regularly post reviews about products, services, and businesses
- You participate in a game where you can accidentally harm someone
- You are the owner of the house
- You often travel outside of the US
- You serve in a non-profit organization
- You are a public figure
Remember that umbrella policies protect against injury to others or damage to the property of others. They do not pay for your expenses or medical treatment.
What’s happening at risk
Due to the rising economy and the rising economy, high-risk populations need to reassess and increase their coverage. The stabilization is exacerbated by the combination of recession and recession.
Economic growth of people It is the word for the size of the possibility of cases and the size of the establishment. This growth has been driven by higher jury awards, voluntary workers’ compensation claims, increased compensation, the availability of legal fees for class action cases, and new tort and negligence concepts.
These developments have had a significant impact on the top 50 US judgments, with the average settlement increasing from $28 million in 2014 to $54 million in 2018.
In other words, losing a case for any reason is increasing, and in order to protect your property, your umbrella coverage limits must continue.
Economic growth and an increase in the cost of goods and services that reduces purchasing power. The US Consumer Price Index (CPI) rose 6.8% between November 2020 and November 2021. By June 2022, the inflation rate had hit 9.1% annually, the highest since 1981. By July 2022, the rate had decreased slightly but was 8.5 %.
The recession has affected almost every industry. Repairing or repairing a damaged car or a damaged house costs more money today than it did before the pandemic. Wage growth means that the number of potential liabilities for lost wages is also increasing. And medical bills are always rising.
We can help
Those who have an umbrella policy should review the limits of the policy and see if it is time to extend it. The uninitiated will find that the peace of mind they get from keeping umbrellas is worth more than the annual cost.
Reach out to the BNC Personal Insurance Team to check your limits or purchase new policies. We are here to help you ensure that your loved ones and your belongings are well protected.