What is an Umbrella?

It is hard to change the channel as Umbrella by Rihanna  comes on to your favorite radio station. The song is so catchy it is nearly impossible to not sing along with the chorus.

A lot of people do not know that the insurance industry has our very own version of an Umbrella. The sad truth is, for the majority of people, an umbrella is a policy they know nothing about or don’t think they need

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So what is an umbrella?

An umbrella is a policy that provides liability coverage for you above the limits you carry on your auto and homeowner’s insurance. It offers protection for you against liability claims or judgments.

Why is this coverage important? 

Sadly, we live in a world that lawsuits are not uncommon. There are plenty of instances in which you might be dragged into a lawsuit, legitimate or frivolous. The biggest question is, can you afford the potential damages awarded to a victim of a lawsuit you were dragged into?

Not always the other family!

A lot of people wonder how often an umbrella policy is even needed. Bad things in life happen daily and like my mom always told me “it’s not always happening to other people.”

Prime Example

Bob and Jane (fictitious names) were an older couple driving home from a weekend up in Traverse City. Driving down U.S. 127 right before the I-69 interchange they hit a bad storm. Bob lost control of the vehicle and it rolled into the ditch. Sadly, his wife Jane did not survive the accident.

Sometime after the funeral Bob was served with papers stating that his children were filing a wrongful death lawsuit against him for the death of their mother. The court awarded the children a settlement that exceeded the liability limits that Bob had on his auto insurance policy.

We had an Umbrella policy in place for Bob that picked up the damages where his auto insurance limits ran out. The umbrella picked up the remaining balance and Bob, already emotionally damaged, was not financially ruined.

Should I Carry an Umbrella? 

Yes, everyone should carry an umbrella policy. For as little as $12 a month you can purchase an extra $1 million worth of liability coverage. Plus, if you have Auto-Owners insurance you qualify for a 5% discount on your home and auto insurance policies.