Do you have a personal umbrella policy? If so, we congratulate you. This is a smart move to increase your liability protection. If not, read on to learn more about umbrella coverage and why excess uninsured motorist coverage (also known as UM or UIM) is an addition you’ll want on your policy.
What Is an Umbrella Policy?
Your home and auto insurance policies provide liability coverage, but it is capped at a certain amount. If you were at fault in a motor vehicle accident with serious injuries, or if someone won a judgment after an injury on your property, would your liability cover it?
The answer for most folks is “no.” They’d wind up having to dig into their assets or sell their home to cover the damages.
An umbrella policy is a separate coverage you can purchase to increase your liability protection. This type of insurance kicks in where your other liability coverage leaves off. It is typically capped at $1 million or more to provide ample protection.
Why Do People Take Out Personal Umbrella Insurance?
In the scenario described above, a lawsuit or bad accident would be devastating for most people. They would lose their hard-earned savings, home, and possibly their business to cover the cost of the incident. So, an umbrella policy is just good sense.
Many different types of people enjoy the peace of mind that comes with a personal umbrella policy. Some are worried about young drivers in the household, while others are dog owners concerned about the consequences of a bite.
Umbrella insurance is particularly recommended for high-net-worth individuals. These people have more to lose and may even become targets for predatory lawsuits because of perceived deep pockets.
What Is the Benefit of Excess Uninsured Motorist Coverage?
Uninsured motorist coverage is being added to personal umbrella policies more frequently lately. This type of insurance protects you if you are involved in an accident where the party at fault has no insurance or only minimal insurance.
Think about the minimums for auto insurance in Missouri: $25,000 per person and $50,000 per accident. This would be a drop in the bucket if someone hit you and you had hundreds of thousands in medical bills or couldn’t work anymore.
Usually, people who only carry minimum insurance (a.k.a. underinsured) don’t have any other assets to make up for their low insurance coverage. And some people don’t carry any auto insurance at all, whether they’re in-state scofflaws or from states that don’t require vehicle insurance.
This is where uninsured motorist protection would be a huge advantage. If you’re looking for an umbrella policy, we encourage you to find one with this coverage. If you have an umbrella policy, check to see if UM/UIM is part of your insurance, or ask to have it added.
Whether you need an umbrella policy for the first time or want to find out more about uninsured motorist coverage, our independent agents are here to help. Call Lang Insurance at 636-229-7000 today, or reach out online for the information you need.