As long as there are lawsuits and judgments, there will probably be insurance to pay for them. But auto insurance policies have relatively low limits on liability insurance. To mitigate the financial impact an at fault accident would cause you, where do you get higher limits to protect yourself? You might need Personal Umbrella Insurance.
There are no guarantees of prevailing in a lawsuit, there are too many variables. No one can predict what the other side will be willing to settle for, how far into a case the other side is willing to chase you, and how a judge or jury will decide. You can?t even decide if your insurance company will settle the case with the other side, even if you feel you were not at fault.
Personal Umbrella insurance coverage is designed to give you added liability protection beyond the relatively low limits your auto (and home) insurance. Depending on your claims history, usually amounts of $1 to $5 million are available. Personal Umbrella insurance is secondary and only pays after your auto (and/or home) insurance limits are exhausted.
Liability insurance is the part of your auto (or home) insurance policy that pays for expenses such as the injured persons healthcare expenses, litigation, and lost wages from negligence. The liability portion of your car insurance policy also covers litigation, but without the high limits of umbrella.
It often makes sense to get umbrella coverage because if you add the healthcare expenses of a plaintiff that?s been seriously injured and your legal fees, standard auto insurance limits are not nearly enough. Each state has laws that will hold at fault drivers accountable for injuries. The driver will probably be sued for the damages. Personal assets from the at-fault driver could be seized after securing a judgment. You could also end up with lien on your house and/or damaged credit. Even if you don?t make much or have much now, you might have income or assets in the future.
Personal liability umbrella insurance does not have a large added cost for $200-400 per year (around $1 million). Additional liability coverage is an even better deal per million, with probably more underwriting. Just remember, liability insurance usually covers your personal (non-business) activities.
Written by Craig J. Casey
Craig J. Casey is a financial writer, blogger, former insurance agent and stock broker. He has help thousands save money on their auto insurance via his website, 4carinsurancequotes.com
Source: http://www.jrapublish.com/personal-umbrella-insurance.html
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