Umbrella Policies
/I was recently at the salon (all masked up, of course) getting my hair done by my favorite stylist. She and I usually chat about the things we have in common, like our dogs, the joys of home ownership, the funny things our husbands have done, and so on. This past visit, she mentioned her neighbor’s adorable little girls love to wander into their yard and play with their dogs while they are on a tie-out. Due to the current pandemic, she said getting a fence put in means being on a waitlist until at least next spring. While I have no doubt her sweet pups are well-trained, this conversation prompted me to ask if she and her husband have purchased an umbrella liability policy to protect themselves in case of an unfortunate accident with the dogs and the neighbor children. Which, in turn, prompted her to ask me what an umbrella liability policy is and why they might need one.
An umbrella liability policy protects your net worth in the event you, or a member of your household (furry family members included), cause an accident for which you are held liable. If your sweet, adorable dog unexpectedly bites your neighbor’s child, or if you cause a horrible car accident, you may be sued to cover medical bills or other expenses. An umbrella liability policy can step in with coverage over and above what is offered by your homeowners, renters, or auto policies.
The most common liability coverages under these types of policies are $100,000 per person and $300,000 per accident or $250,000 per person and $500,000 per accident. If you have a $1 million umbrella liability policy in addition to your homeowners, renters, or auto insurance, it increases the maximum amount of coverage to $1 million.
These policies are typically very inexpensive for a large amount of coverage and are the type of insurance you’ll be happy you have in place if an unfortunate event occurs in the future.
- Margaret Gooley, CFP®, Worley Erhart-Graves Financial Advisors
