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Umbrellas Are Not Just For Rain

May 15, 2012

Two things are true: April showers bring May flowers and lawsuits are expensive.  But, while it is obvious to use an umbrella in the rain, it is not quite as obvious to use an umbrella to protect your financial assets.  Consider the following worst case scenario: you have a good driving record and carry insurance with above average limits.  The problem is that you are involved in an accident resulting in significant injury to multiple people in the other car. Your limits aren’t going to go very far and once your policy limits are gone then you are personally responsible for the rest. If you don’t think you might get sued, then think again.  The cost of medical care is on the rise and litigation is costly.

An umbrella policy is literally what it sounds like — a policy that steps in to provide high limits above your auto or homeowners policy.  In some cases the umbrella will drop down to provide liability coverage for things that may be excluded on other liability policies.  How big should your umbrella be?  Well that depends.  Typical limits are $1,000,000 and the cost is very reasonable.

Although specific terms and conditions vary, an umbrella policy provides an extra layer of protection for a wide array of liability scenarios.  Remember that it’s not just an auto accident that can get you into trouble.  Imported Spanish tile looks great on the patio…that is until someone slips and falls.

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