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by Justin Honey (Principal Agent)

In a nutshell, an Umbrella policy provides additional coverage when your primary insurance policies are exhausted.  Let's be honest, we live in America, and our legal system gives us the freedom to pursue others (and rightly so) for the financial burdens and damages that they have caused.  Your auto insurance policy, for example, may only provide coverage for the first $250,000 (or possibly less) in damages.  Have you ever wondered what happens if I cause a major accident and multiple people are injured, or someone can't go back to work and I get sued for $1,000,000 for their disability or time off work?  What if a neighborhood child steps on my property and gets injured on my playset or falls in to my swimming pool?  A Personal Umbrella policy addresses these concerns.

This article will be one of three articles that I am going to write on the subject, explaining the top 3 reasons why, in my opinion, everyone should carry an Umbrella policy.  Whether you have a lot of assets or not, an umbrella policy is a crucial part in your insurance and risk management planning.

Reason #1:  "Protecting your Future Wages"

In our court system, if you are sued for bodily injuries, that lawsuit is against you directly, never an insurance company.  You may have auto liability or home liability coverage that defends and pays for actions that you are liable for, however, the lawsuit is always directly against you.  In the case of car crash involving a high amount of injuries, medical costs, pain and suffering, disability, or lost wages, your auto insurance policy would pay for those damages that you are liable for, but only up to the policy limit.  In Indiana, that limit could be as low as only the first $25,000 in damages. 

Have you ever wondered what happens to those lawsuits/damages that exceed your policy limit?

You become responsible for every dollar above your insurance policy limit.  After all, the lawsuit is directly against you, and while you may have insurance to cover a portion of those costs, if you have inadequate coverage, you could be looking at a significant judgment against you.

As with any court judgment, for amounts you fail to pay, those can lead to wage garnishments.  It's not a pretty picture when you cause an accident or bodily harm and get sued for $1,000,000 and have a policy that pays only $250,000 of that, leaving you with $750,000 to be garnished from your wages over the next several years or even decades.

So you might think, "oh this'll never happen to me?"  We hope it doesn't.  However, if an accident occurs, you can't always control or cherry pick WHO you get in to an accident with.  What if you injure a neuro-surgeon who can't return to his occupation because of accident?  What if you slide on ice and run in to a school bus full of children?  What if you're changing lanes and the motorcycle doesn't quite show up in your mirror and a quick check of your blind spots doesn't reveal them right there at your side?

These types of situations happen and the financial impact to you and your family can be devastating.

So whether you're 20 years old getting out of college and starting your first job and have minimal assets, or if you are 50 years old and well established, an Umbrella policy is essential to a good insurance plan.

At Absolute Integrity Insurance, we offer plans between $500,000 and $10,000,000 in Personal Umbrella coverage.
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