Umbrella policies are for EVERYONE! When else are you offered $1M for about $200 or so a year? How can you say no to that?! We get it all the time...the reasons why "I just don't need it." So, I am going to explain and give you some real life examples as to why you really do need it. My goal is for everyone to have an umbrella policy and know why they need it!

Let’s start with the basics shall we? An umbrella policy provides additional liability insurance for claims that go above the limits on your existing automobile and homeowner’s policies. It is not limited to just home and auto. If you own a boat and have a boat policy it will go over that too. Since umbrella policies are in excess of your primary policies they do carry some requirements. Your homeowners policy needs to carry a minimum of $300K liability limit (as a side note, we recommend $500K minimum on homeowners because it's worth it and cheap! But that's another blog at another time). The minimum for the auto policy is usually a $300K combined limit or $250K/$500K/$100K split limit for liability (another side note, I wouldn't recommend lower than this with or without an umbrella - again worth it!). Your driving record and claims activity for the auto and on your home also affect the umbrella policy just as it does the primary policies. However, even with some blemishes there are companies that can still offer a policy, so no excuses!

Now I am going to put it into perspective. I am not a fan of the phrases “You can not get blood from a turnip” or “You can’t squeeze water out of a rock”. When it comes to claims and judgments and injuries…they will get that water from that rock! I have heard a thousand times, “I don’t need an umbrella policy, I don’t have anything.” It is so easy to think that way, I was guilty of it once too, but EVERYONE has SOMETHING! You have future earnings, you have tax refunds, and you may have a retirement fund, investment properties and savings accounts with your children’s college funds in them. Scary isn’t it?

So what could happen? If you have children, pets, drive a car, have a trampoline or pool or host guests in your home – anything can happen! Ok, you are driving down a road on your way home from work, the same road you drive 5 days a week or more. It’s a nice day and you have the windows down to enjoy a little wind. The wind picks up something from inside the car and blows it around. You reach over to grab it before it blows out of the window and BAM! The car in front of you stopped and you just rear ended them going about 35 MPH. It was with enough speed that it caused some “minor” spinal injuries, broken ribs, broken nose and a knee injury to the driver of the other car and the passenger hit their head on the window causing a head injury as well as some injuries from the seatbelt to their chest and shoulder. The driver needs a couple back surgeries as well as surgeries to correct the broken nose and injured knee. After surgery they will need physical therapy for the back and knee to heal properly. Let’s say two sessions a week for the next 12 months, at least. The driver’s medical bills and physical therapy bills will exceed the $250K limit on your auto easily. Not to mention what you will owe for the time they are unable to work due to the injuries and any pain and suffering they decide to sue for. This is just the driver; we haven’t even imagined how much the passenger may need for their injuries. Without an umbrella policy, anything not covered by your auto policy, will have to come out of your wallet. Now I am going to add a little twist. Say you don’t have an umbrella policy and the limits on your automobile are the minimum required by your state. We will use VA as an example; the VA state minimum limits are $25K/$50K/$20K. In that scenario the $25K limit will be used up and your insurance company writes a check and they are done. The driver has underinsured limits of $250/$500/$100. They write the check to their insured for $250K and they are done. Then, they will come to you for that $250K. Again, we haven’t touched on the passenger. It can get really expensive and very quickly.

Bottom line is to protect yourself and to protect your future. You pay so little compared to the protection, piece of mind and coverage that you receive when you carry an umbrella policy.