Umbrella Insurance – Why You Are Covered
You may have heard of Umbrella Insurance but wondered why you would need it. We have put together more information on what Umbrella Insurance is, and an example of why this policy may be right for you.
The term “umbrella” means that you are buying liability insurance that covers or protects you from a wide range of potential legal issues. Most policies cover normal issues that are in excess of standard insurance policy limits. These policies typically start out at one million dollars and can be significantly more.
If you cannot pay a claim you could be facing a lawsuit with major legal and financial problems. Let’s take a look at fictional couple Oscar and Nancy.
Nancy and Oscar loved their new home and they both worked very hard to build a dream house that they planned to live in for the rest of their lives. They also had a new car and an SUV that was only two years old. The couple planned on starting a family soon, life was great, until one day Nancy had a traffic accident.
Oscar warned Nancy about driving her car while talking on her cell phone, but she ran a local beauty salon and her people were constantly calling her for advice. One day while driving and talking she pulled into traffic and did not see a new luxury car that was coming down the road. The car swerved to avoid her and hit a utility pole seriously injuring the driver.
It turned out that the driver was a professional baseball player and this accident essentially ended his playing career. In addition, the ball player ended up suing Nancy and Oscar for millions of dollars in lost wages, and their car insurance liability was only $300,000. Needless to say, Oscar and Nancy’s lives were never the same. If they had the foresight to take out Umbrella Liability Insurance, things would have been different.
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