Umbrella insurance

Umbrella insurance is a type of coverage that protects you from excess liability risks from events such as large lawsuit judgments against you personally or your company. Umbrella insurance also covers expensive attorney fees during the litigation process. This type of coverage kicks in after your standard liability policies end or in some cases are not covered.

Common features and benefits of an umbrella policy are:

• Protection from serious bodily injury: In the event that someone is seriously injured on your property, your standard home insurance coverage or commercial property insurance policy may not cover excess liabilities. Umbrella insurance will take over where that policy leaves off ensuring you are not exposed to enormous financial liabilities.

• Excess property damage protection: In the unfortunate circumstance where you are liable due to an auto accident where you cause significant property damage that is not completely covered by your standard auto insurance policy, this type of umbrella insurance greatly reduces your financial vulnerability.

• Libel or slander: In the event you are sued for slander umbrella insurance covers the liability derived from a judgment against you.

• Landlord liability: If your renters or others file a lawsuit against you that resulted from serious injury on your property you are covered for.

• Malicious prosecution: If it is determined that you filed a wrongful or malicious lawsuit against someone and you are liable for restitution this umbrella policy can cover the financial judgment against you.

It is important to know that among all personal injury settlements 13% exceed the one million dollar mark. If you don’t have umbrella insurance these extra costs not covered by standard policies will come our of your pocket or there will be a lien placed on your property, wages garnished and all other assets become vulnerable to cover your final financial obligations in a judgment against you.

In order to asses your liability risk, your insurance broker will look at all your assets and determine how much umbrella coverage you will need. The more you have, the more you have to lose! We will look at your net worth (your debt to asset amount) and determine what you net worth is. Then we will look at your all of your assets to see what is vulnerable. It is advised that you cover the total amount of your assets vs. your net worth because those assets are still up for grabs and you would not want o have to liquidate your assets in order to pay a lawsuit against you.

Your future income is also vulnerable from up to 25% of your annual income in garnished wages. A good formula to calculate what you should cover is by multiplying your annual income by 5. That total plus your total assets is what you should cover with an umbrella insurance policy.

Before you add umbrella insurance coverage most insurance companies will require that you have a minimum amount of liability coverage in your auto and home policies before you can obtain an umbrella policy. Once you have set amount of coverage you can purchase umbrella insurance. What most people don’t know is that this type of policy is not expensive. For a typical 1 million dollar policy the cost averages about $150 - $300 annually and costs only an additional $50 - $75 more for every 1 million dollars more in coverage.

Rates vary depending on some key factors such as your credit score, past claims, senior discounts, higher deductibles, and bundling your policies under one company.

Talk to a Blue Sky representative today about an umbrella insurance policy for your all of your assets. Being proactive before the storm hits can make a huge difference in you life and your future financial stability.