Who Needs Umbrella Insurance?

Herb and Mable are driving their RV down to Arizona where they spend each winter. Both are excellent drivers, so they aren’t worried about the light rain that is falling. Their RV has one of those bumper stickers that proudly says ‘We Are Spending Our Children’s’ Inheritance.’

Suddenly a break opens up in traffic ahead of them. Herb sees a huge truck tire in the road, swerves to avoid it and bumps the car next to him. Panicking, that car’s driver slams on his brakes, causing two other cars following to crash into him.

It’s a four-vehicle accident, and the police cite Herb as being at fault for the whole incident. One of the passengers in the other cars was pregnant. The trauma of the accident required her to have a long hospital stay to protect her unborn baby’s life. Another of the drivers was a surgeon. When his air bag deployed, it broke his hand, causing him to stay out of work several months while his hand healed.

Herb’s total liability included not just the vehicle damages, but the long hospital stay, the surgeon’s lost earnings from staying out of work, and everybody’s medical and ever-present legal fees. Altogether, the court ruled Herb liable for $600,000 in damages.

Herb and Mable were excellent drivers, and had always thought their $300,000 of vehicle insurance was adequate. The extra $300,000 for damages, though, had to come out of Herb and Mable’s savings and investments. After turning the money over, Herb grudgingly removed the bumper sticker from their RV. The irony was a bitter lesson in legal liability.

Notice that Herb hadn’t done anything intentional or bad to be held liable. It was an accident. 

Who Needs Umbrella Insurance?

As we can see, the liability protection from your automobile, RV, homeowners, motorcycle, boat or other policies might not be enough protection. Umbrella insurance makes up that difference. It is usually purchased by ordinary people who own property, savings, investments, or are worried about liability claims against them.  The coverage follows you worldwide.

In addition to protecting assets, umbrella insurance covers your future earnings. Let’s say you don’t have enough assets to cover a settlement against you. In this case, without umbrella coverage, you’d be paying off the debt for years. Not good.

Understanding How Personal Umbrella Insurance Works  

You will always need your regular insurance policies like homeowners, automobile, RV, motorcycle, boat, rental property and others. Those are your first line of protection.

A personal umbrella policy picks up where those policies end, and does it much more economically than increasing those other coverages. Generally, you would buy umbrella policies in $1 million increments, depending on your need. It’s very affordable too. An umbrella policy with $1 million in coverage typically will cost about $150 to $300 per year, depending on your circumstances. That gives you and your spouse peace of mind at a very low price. Sound good?

Stand-Alone Umbrellas VS Supported Umbrellas

Some companies offer a personal umbrella policy without requiring any supporting underlying policy. That’s called a ‘stand-alone’ policy. Most companies, though, require you to have a homeowner’s policy in force for their umbrella to be available.  That is called a ‘fully supported’ umbrella policy, and is the most common, and most economical type.

It’s Important to Include UM/UIM on Your Umbrella Policy

Let’s say Herb was not liable for the accident, but he and Mable had suffered serious injuries. Suppose they had long hospital stays, lost income, and suffered a total loss of $400,000.  Also, suppose the driver at fault only had $300,000 in insurance. He was under-insured. Even worse, suppose the other driver had no insurance. He was uninsured.

That illustrates why it’s best to include uninsured motorist and under-insured motorist coverage in your umbrella policy. Again, it protects you. Make sense?

Get a Free Analysis and Quote

State laws dictate the minimum amount of coverage you need to register your motorhome, but there are many other coverages to look at. Companies that specialize in RV insurance offer policy features that traditional auto insurance policies do not. Since your RV is both a vehicle and a home, it requires a combination of coverages. Know your options to be sure that you are fully protected.

We specialize in RV insurance in 22 states. You can have a complimentary, confidential policy review and analysis. After that, we can discuss a custom-tailored umbrella policy that fits your budget and gives you the coverage that makes sense. It’s fast and easy. Contact us at 844.727.7207 today!

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