Imagine you’re hosting a party here in Mississippi, and your grill gets knocked over. The flames quickly flare up and set your house on fire. Everyone makes it out alive, but 5 people have been seriously burned and end up in the hospital, unable to work for 3 weeks.Your home insurance policy will pay for your home damages but is exhausted before it can pay any medical bills or compensation for the loss of work. You owe $1,000,000 and have no option but to sell your home and use your retirement fund, and that may not even be enough. This scenario is a nightmare for anyone, but it has become a reality for many. This is where umbrella insurance can be life-saving.
It’s hard to believe that the liability insurance included in your home and auto insurance policies could ever truly be necessary. $300,000 is a lot of money, especially when your assets don’t even add up to that much! The problem here is that most people don’t understand when and how liability insurance will be used. Not only can all of your assets be taken away from you in a lawsuit, but your future earnings as well.
Learning what liability insurance is, how it can be used and why you should have umbrella insurance is vital in protecting yourself, your family, and all the things you love.
What is Liability Insurance?
Liability insurance covers any losses you might experience when you’re at fault for an accident. This includes all of your expenses, be it medical, or replacement costs, and all of the expenses you’ve caused for others. This includes potential earnings too if someone you injured cannot work for an extended period of time. It’s easy to see how these costs could add up when an accident happens. The scary part is that it’s not just all of your assets that are at risk. They can also take your future earnings, and keep you in debt until you pay off the expenses.
Where Does Umbrella Insurance Come Into Play?
Umbrella insurance can give you just what you need to cover the holes that your liability insurance doesn’t. Umbrella policies start at $1 million, but it’s important to keep your coverage proportional to your assets. For example, if you had 5 million dollars worth of real estate on top of your personal home and personal cars, 1 million dollars in coverage would not be able to cover everything.
Check outthis article by FiGuide to understand exactly how much umbrella insurance you should get.
What Puts You At Risk?
There are certain qualities that can put you at a greater risk for a lawsuit. These include
Owning recreational vehicles, trampolines, or a pool
Having frequent guests in your home, such as throwing parties, having clients over, or even construction workers during home renovations
Being a prominent figure in your community; in business, entertainment, or even being on a board of directors
Is It Really Worth It?
The typical $1 million policy costs between $150 and $300 a year. Even with a $300 payment, it would take over 277 years to pay out the full amount of your policy. If you began an umbrella policy at 25 and didn’t need it until you were 75, you would still be saving $820,000 in total.
Adding on an extra million or more in coverage does not necessarily mean doubling the premium either. A $2 million policy can cost between $225 and $375, $3 million is between $275 and $425. These policies can save you between $1.9 million and $2.8 million in 50 years.
How to Start Your Quote
Every person is unique and therefore requires a carefully crafted policy. Good news, our Agency offers custom, tailored insurance proposals to ensure you get covered properly but don’t pay more than you have to.
If you’d like us to review your current policy and provide you with no obligation quotes, call our office, or see our Quotes page to get the process started.
Either way, we make the process super simple!
We serve the North Mississippi area, including towns like Olive Branch and Southaven, including Desoto County, Tate County, and Lafayette County.