When It Rains, It Pours

Ray’s Take

I always have an umbrella in my car. Most of the time it just takes up space and I end up pushing it aimlessly around the car to make room for other things. And there are many months of the year when an umbrella seems utterly pointless. But in Memphis, when it rains, it pours, and when that day comes I’m happy to have it. 

The same holds true with an umbrella policy. Just like the name suggests, it’s important coverage to consider adding to your insurance arsenal. You may not ever need it, but when you do, you’ll be glad it’s there to protect you. 

Also known as “lawsuit insurance,” an umbrella policy is extra liability insurance over and above the liability coverage that’s part of your existing homeowners and automobile insurance. In addition, an umbrella policy can also cover the legal fees to defend you from claims of personal injury or property damage that could arise due to accidents.  It can even pay for the legal fees to defend you against false arrest and claims of libel, slander and defamation of character.

The truth is, accidents do happen. Do you have a pool, teen drivers, motorized vehicles, a boat, diving board or a trampoline? There are so many different scenarios of the unthinkable happening, and in every case, you need to be protected. 

Don’t assume the liability coverage in your home and auto policies are sufficient. Most home insurance covers liability claims only up to $300,000 for personal liability, and most automobile policies provide up to $250,000 per person for bodily injury. It’s usually recommended to get an umbrella policy if you have assets over $1 million, which is the minimum amount covered and costs between $150-$300 per year.  

Consult with your financial representative to see if an umbrella policy is right for you and your family so you aren’t caught out in the rain! 

Dana’s Take

Our friends’ college-age child, close in age to our own, was rear-ended by a drunk driver with two friends in the car. Tragically, one child was killed, even though no one did anything wrong. They were simply driving home. 

It is hard to imagine the emotional toll this event has taken on those three young adults and their families. Now, imagine if a lawsuit for millions of dollars was added on top of their loss. An umbrella policy could help cover some of the costs if this would have occurred. 

Ask your insurance agent or a Certified Financial Planner to review your insurance coverage and the policies of your adult children to make sure a large umbrella policy is there to protect your family. It’s one umbrella I hope you never have to use.

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