Why You Need Umbrella Insurance Now More Than Ever

Insurance is getting more expensive and harder to find, making it more important than ever to protect your assets. One of the best ways to do that is with umbrella insurance. But many people don’t have an umbrella insurance policy—or don’t realize how valuable it is.

What Is Umbrella Insurance?

An umbrella insurance policy gives you extra liability coverage beyond the limits of your auto or home insurance. Think of it as a safety net that steps in when your regular coverage runs out.

For example, let’s say your auto insurance covers up to $250,000 in damages, but you cause an accident that results in $500,000 in medical bills for the other driver. Your auto policy pays the first $250,000, and if you have an umbrella policy, it covers the remaining $250,000—assuming your coverage is high enough.

Is It Worth the Cost?

Umbrella policies are surprisingly affordable for the amount of protection they provide. A typical family with two drivers and two cars might pay about $150 per year for $1 million in coverage.

That’s about $12.50 per month—less than the cost of a streaming subscription—for coverage that could protect you from financial ruin. As one insurance expert puts it: “You’d be crazy not to have it.”

How Umbrella Insurance Affects Lawsuits

There’s one important thing to keep in mind: having an umbrella policy can sometimes lead to larger settlement demands. If someone sues you and sees that you only have $250,000 in coverage, they may accept that amount rather than risk a long trial. But if they know you have a $1 million umbrella policy, they might push for a bigger settlement.

Even with this risk, the protection an umbrella policy offers is worth it. If you are responsible for serious damages, having extra coverage could save you from financial disaster.

Who Should Have an Umbrella Policy?

If you have assets to protect, an umbrella policy is a smart choice. It’s especially important for:

• Homeowners
• High-income professionals
• Small business owners
• Parents of teenage drivers
• Anyone with significant savings or investments

Today, even a simple accident can lead to a lawsuit that could change your life. An umbrella policy gives you peace of mind for a surprisingly low cost.

As the insurance market becomes more challenging, making smart coverage decisions is more important than ever. An umbrella policy should be a key part of your financial protection plan.