You are a hard worker, and you know the value of a dollar. You do not cut corners when protecting your assets, choosing to purchase enough homeowners, auto and recreational insurance coverage to provide you with the safety net your family needs. Even with full coverage, however, you could still have gaps in your liability protection.
Umbrella insurance is supplemental liability coverage that kicks in when the limits on your primary policies are reached. It typically comes with much higher limits at a fraction of the cost of other types of coverage; not to mention it extends protection for a wide range of claims not covered under home and auto insurance.
Umbrella Insurance – Not Just for the Top 1%
Many people mistake umbrella insurance as an insurance product designed primarily for the top one percent of income earners. They could not be more wrong. In fact, nearly anyone with assets or capable of earning an income can benefit from the extended liability protection offered by an umbrella policy. From high-salaried CEOs to blue-collar middle-income workers, umbrella policies are designed to protect current assets as well as future earnings.
The standard umbrella insurance policy typically starts with $1 million in liability protection, with additional coverage available in $1 million increments. While that may sound like a lot – especially for someone with other types of liability insurance and fewer than $1 million in assets – it is an inexpensive way of protecting your finances from litigation and legal judgments. If you win a lawsuit, court and legal defense fees can still add up to large sums. If you do not win, the financial consequences could be devastating.
Imagine walking away from a car accident unscathed, while three passengers and the driver of the vehicle you hit are transferred to the hospital with life-threatening injuries. Between the four of them, they must undergo multiple surgeries, miss months of work, spend countless hours in physical therapy, and cope with emotional and mental anguish from the accident. One is permanently disabled and no longer able to work. A court makes a judgment of $2 million for the victims, but your auto insurance liability is exhausted at a $300,000 limit.
Without an umbrella policy, the court may liquidate your financial accounts and take aim at any assets you own, such as rental properties, college savings accounts and even your retirement funds. You might also be forced to tap the equity in your home to pay the balance. If that still is not enough to satisfy the judgment, you may face garnishment on your future wages.
Choosing an Umbrella Insurance Policy in Wisconsin
If you are a high earner, own a home, have investments or have savings in a retirement account, umbrella insurance should be a part of your financial plan. We here at Carrigan Insurance can help you evaluate the value of your assets and future income, as well as identify the level of your liability risk exposure. We can help you compare umbrella insurance rates and coverage, as well as help you select the policy that is right for you. At an average cost of a latte per week, it is a small price to pay for peace of mind.