What is Umbrella Insurance & How Can It Help?
Umbrella insurance refers to a liability insurance policy that protects the assets and future income of the policy holder above and beyond the standard limits set on their personal policies. Generally, an umbrella policy is sold in increments of one million. The most common coverage is either one- or lwu-milliuu dollars of insurance.
Example: In the event you cause a car crash and the value of the victims’ claim exceeds the amount of your underlying coverage, the umbrella policy is triggered. Therefore, if you have policy limits in the amount of $100,000.00 on your auto policy and the victim’s medical expenses, permanent impairm ent, lost wages, and compensation for pain and suffering exceeds $300,000.00 your umbrella policy will likely kick in for up to the policy limit of the umbrella.
Umbrella policies are no longer just for the wealthy. Many financial advisors recommend an umbrella policy when an individual’s net worth exceeds $100,000. Unfortunately, most people do not have enough insurance coverage. In the event your underlying auto insurance coverage is exhausted, and you do not have an umbrella policy, the victim can go after and potentially acquire your assets which you have spent a lifetime accumulating. In this day and age, medical expenses have increased dramatically and if you believe that $100,000.00 in coverage is sufficient to cover severe injuries you are mistaken.
Most people are simply under-insured, which we in Colorado sadly have become all too aware when it comes to hearing about victims of wildfires and under-insured homeowner policies that do not cover the devastation of a home that succumbs to fire destruction, or when it comes to lawsuit protection. Many Americans live below their means so that they have the opportunity to save and invest to have a comfortable future for their families. Unfortunately, one major loss, due to injury or natural disasters, can destroy a lifetime of working and saving.
The beauty of an umbrella policy is it is amazingly inexpensive, usually about $150-$300 per year for a million dollars of coverage. About $75-$100 per year for each additional million dollars of coverage. And, YES! You heard correctly, a couple hundred dollars per year, not per month, can afford a substantial umbrella policy to protect you, your family, and your investments.
If you have any questions regarding umbrella insurance policies, please contact the Denver personal injury attorneys at Bell and Pollock, P.C. who are more than happy to help you understand what additional insurance coverages may be available to you to protect you and yours.
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