Should I have an Umbrella policy?
The typical personal auto insurance has limits of $100,000 per person and $300,000 per accident. Most personal auto insurers offer maximum limits on their policies of $250,000 per person and $500,000 per accident.
A serious auto accident can have damages which far exceed the limits of your personal auto policy. According to the National Safety Council, the average car accident victim has the following economic costs
| Death |
$1,500,000 |
| Nonfatal disabling injury |
$80,700 |
| Incapacitating injury |
$74,900 |
| Non-incapacitating evident injury |
$24,000 |
| Possible injury |
$13,600 |
| Property damage crash (including minor injuries) |
$9,300 |
These estimated costs for motor vehicle accidents and injuries include wage and productivity losses, medical expenses, administrative expenses, motor vehicle damage, and employers’ uninsured costs.
Typically, a lawsuit can be three times the amount of the economic costs. So a nonfatal disabling injury could on average be $250,000. A death could result in a claim of $5,000,000 or more. If you don't carry $250,000 of liability coverage, you need to increase to that level. However, that level of coverage will only protect you for the average accident.
Some of us are just one lawsuit away from having our entire savings wiped out. To protect yourself and your assets, you are going to need an umbrella policy.
An umbrella policy is an extra layer of insurance that can pay for medical, court, or other expenses you are found liable for in the event that your underlying home and/or car insurance policies are exhausted. Coverage levels start at $1 million and can run up to $10 million and beyond. An umbrella policy can extend the limit of more than just your personal auto coverage. Typically, it will extend the limit of your homeowner, boat, motorcycle, RV or any other policy you have.
In many cases, policyholders can add umbrella coverage on to their current policy using the same insurance provider. Before signing up, policyholders need to speak to their agent to be sure that they qualify for coverage.
Families with assets, including homes, retirement savings, brokerage accounts, and cars, will need to protect them with an umbrella policy because most policies only cover a portion of these assets.
If you have any questions about umbrella coverage, give us a call and we can find the level of protection that is right for you!
Dan Smith is a licensed independent insurance agent located in Pittsburgh, Pennsylvania. He owns James L Smith Insurance and has been serving the insurance needs of customers in Pittsburgh, Pennsylvania for over 30 years. He is a graduate of the College of Insurance. You can get in touch with him by calling 412-531-3111 x112 or by emailing him at dan.smith@jlsins.net. Find out more about Dan by visiting his website at www.insurancepittsburgh.co