Umbrella Policy Misconceptions

Understanding Umbrella Policies

In a world where people are more likely to seek legal action, and medical expenses are increasing, you need to make sure that you have the proper coverage at the time of those accidents. Umbrella policies can provide additional liability insurance over underlying policies – such as an auto or homeowners. There are many misconceptions about umbrella policies:

Umbrella Policy Misconceptions #1:

Umbrella policies are too expensive.

These policies are affordable, with an average homeowner with two cars and two drivers, will pay less than $250 a year for a $1 million umbrella policy.

Misconception #2:

I have enough coverage now.

Most auto and homeowners policies provide $500,000 or less in liability coverage. With responsibility for medical bills, lost income, and legal bills when another party is injured, those costs can quickly exceed the limits on an average homeowner’s and auto policy. Furthermore, without an umbrella policy, you will be held responsible for those damages.

Misconception #3:

I don’t have significant assets to protect.

An umbrella policy is needed if planning on developing additional assets in the future. In court cases, the liable party could be forced to pay the injured party from future earnings. By purchasing an umbrella policy, you are protecting the assets you have now and your ability to earn in the future.

Misconception #4:

I am a great driver, and if I am in an accident, the other party will be at fault, and they will pay.

Unfortunately, most people carry low limits on their auto insurance. If hit by a low-limit driver, an umbrella policy can cover you if you add uninsured/underinsured motorists coverage. In other words, an umbrella policy will protect drivers who either have no insurance or insurance with not enough limits. There are a lot of drivers in Ohio who only carry the $25,000 required by the state.

Interested in more information, contact your Hertvk Insurance Group professional for an umbrella proposal.

Additional Resources:

Umbrella Policy Misconceptions

Understanding Umbrella Policies