Do You Need a Personal Umbrella Policy?

Welcome back to our guest blogger Tony Lucacio, President of Merrimack Valley Insurance Agency (Billerica MA).  I have to tell you that I have had nothing but great experience with Tony and his staff.  On several occasions buyers needed his assistance and were very pleased with the service provided. 

This is great information from him – many of us think we don’t need this added protection when we really do. 

I’m often told by clients that they don’t need any protection beyond their home or auto policy for a variety of reasons. I have heard “I don’t own anything and you can’t get blood out of a rock”, or “I’m a good driver and not worried about it”, or most commonly, “I’ll think about it”. Let’s examine what an Umbrella Policy is and what protection it offers.

An Umbrella Policy provide coverage above and beyond the limits provided in your underlying policies, typically a Massachusetts auto insurance policy, a Massachusetts home policy, watercraft policy etc. These other types of policies are placed under the umbrella to provide greater protection, thus eliminating the need to buy higher limits on each underlying policy individually. Many umbrella policies also will fill in when coverage is not provided by your underlying policy, so long as not excluded by the umbrella.

Umbrella policies are available in incremental limits of $1,000,000. This minimum limit is the most commonly sold limit however in recent years $2,000,000 has become a very popular choice as baby boomers and others have seen the value of their assets rise due to rising home prices, retirement accounts and more. Annual premiums for this coverage begins at approximately $150. Your premium will be slightly higher if you own multiple vehicles or homes, have young drivers in your household, or own watercraft, rental property, or recreational vehicles. Incidently, there are all more of a reason one should purchase umbrella protection.

No one every believes they will be involved in a major lawsuit. The simple truth is that accidents can and do happen. A young child chases a ball into the roadway, a driver is distracted and misses a stop sign, your dog bites a child, an acccident in a swimming pool, or any one of other numberous things we do in our daily life that somehow can go wrong are all instances where an umbrella would provide valuable protection. Remember, you don’t have to be responsible to be sued. People are sued often in these circumstances and still must have a defense provided for them. This too is provided by your umbrella policy. Sometimes an auto or home insurance carrier simply write a check for the policy limit when a policyholder is responsible, leaving the policyholder without any further coverage. What would you do if you needed more defense costs or a judgement was for more than the policy limit.

In summary, answering the question “who needs an umbrella policy?” is a simple. Just about everyone. If you own a home, a condo, or rent an apartment, have assets in the bank or a retirement account, you should consider an umbrella policy. For as little as $150 annually you will have piece of mind that your assets are protected. That’s less than the price of two cups of coffee per week.

For more information on umbrella policies, phone (978)667-2541 or click here.

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