By: John Byars, Vice-President
Most people are aware that they need some type of personal liability insurance that’s going to protect them in a situation where there’s negligence, and either bodily injury or property damage. What many others aren’t aware of is the need for a personal umbrella policy. This type of policy is basically another limit of liability that sits over all your other liability policies, like your home and auto insurance. Since it typically cost about 40 cents a day for about a million dollars’ worth of personal liability coverage, it’s probably the most cost-efficient insurance policy in the industry.
Of course, the more exposures you have, like a boat or vacation home, the more expensive the policy is going to be, but you may not realize is that your greatest exposure is going to be your teenager or college student. They’re much more of an exposure than, say, a swimming pool. The fact is, teenagers are going to be teenagers, and until they’re out from under your roof or done with college, they’re your responsibility. Not sure if you need this additional liability coverage? Just take a look at these three real-life claim examples where you’d be covered by a personal umbrella policy:
Example #1: Your teenager gets distracted while driving. Your biggest exposure for a catastrophic liability claim is an auto liability claim simply because we have so many distractions behind the wheel. Let’s take this scenario for example: Your teenager is driving down the road and gets a text message. They don’t see the red light and they T-bone a car with a family inside. As a result, a child is fatally wounded, and the mom is paralyzed for life. This case ends up settling for a million dollars.
Under your policies, you have a $250,000 auto liability limit, but then you also have a million-dollar umbrella policy. That means your auto liability insurance is going to pay the first $250,000, and your umbrella policy is going to pay the next $750,000. Without an umbrella policy, that last $750,000 wouldn’t be covered, leaving you to pay the debt out of pocket.
Example #2: Your teenager is playing football in the backyard. In this claim example, let’s say your teenager is playing in the backyard with some other neighborhood kids – happens all the time. While they’re playing football one afternoon after school, one of the kids gets tackled out of bounds and ends up hitting his head on the concrete. This injury leaves him paralyzed for life, and his parents sue you. This results in a $1,000,000 settlement. Fortunately, your umbrella policy sits over this as well.
Example #3: Your teenager heads to college. When your teenager goes to college, you, as the parent, are now exposed to greater liability risks on several fronts. Because your child is still a dependent, you can be held responsible for their actions even while they’re away at school. Consider an example where your college student attends a party and alcohol is served. They ride with a friend who consumes too much alcohol, but the friend assures your child they are fine to drive home. So, they get in the car and head home. Driving under the influence, the friend gets into a terrible car accident that kills another student. The family of the student sues, and the court rules that $4 Million ($2 Million from the friend’s family and $2 Million from your family) must be paid. Your personal umbrella policy would respond to this claim.
It is to be expected that a teenager may let loose in college, and you may want extra insurance for peace of mind. Your umbrella policy can provide this.
The key is this - any of the scenarios where a personal umbrella policy is going to come into play is going to be catastrophic. Emotionally, it’s going to take such a toll on you that the last thing you’ll want to deal with is the financial side - worrying if you’re going to have enough money after everything gets settled. If something were to happen, and you didn’t have sufficient limits, your personal assets, including your home, vehicles, retirement savings - everything could be at risk.
With a personal umbrella policy, you’re going to have true peace of mind knowing that if something were to happen, there’s coverage in place, and everything’s going to be taken care of financially. With many policies being less than 40 cents a day, most would agree that it’s more than worth it.
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Email John Byars at firstname.lastname@example.org.
As an independent insurance agency, we represent numerous companies, all with a history of excellent service. Through these companies, we will find the best pricing and coverage available for our customers. We hope you’ll reach out to us today online, or give us a call at (205) 694-0088.
Byars|Wright, Inc.. is a locally owned and operated independent insurance agency with offices in the greater Birmingham area that has developed into a major provider of commercial and personal insurance. Since 1946, the agency has made acquisitions to expand its scope of business and delivers a wide-range of insurance products with quality coverage at competitive prices. Byars|Wright has been designated a Best Practices Agency by the Independent Insurance Agents and Brokers of America and was also named “Best Companies to Work For in Alabama” by Business Alabama in 2016, 2017, and 2018. Byars|Wright, Where Relationships Matter. www.byarswright.com.