Coverage Like an Umbrella

If you are like most people, you have some liability insurance coverage through your homeowners and automobile policies. But have your coverage limits kept pace with your exposure to risk? Are you making more money, living in a more expensive home, or holding more assets than you were a decade ago? Even if your income and net worth haven’t increased significantly over the past 10 years, consider this: Between 2001 and 2007, the average jury award for all liability cases increased by almost 62%.1

Although the risk of being hit with a multimillion-dollar judgment in a personal injury case is fairly low, so is the cost of owning adequate protection. An umbrella liability insurance policy may help add an extra layer of insurance coverage to your current risk-management strategy without significantly higher premiums.
For a Rainy Day

An umbrella liability insurance policy is designed to supplement your auto and homeowners policies. If your obligations to a plaintiff exceed the limits of these primary policies, the umbrella policy can help pay the difference, up to the policy limits. Umbrella policies typically charge a few hundred dollars a year for $1 million of coverage. The benefits can be used to help pay jury awards, plaintiff medical expenses, and legal fees — even to defend against a lawsuit that has no merit.
Are You at Risk?

Not everyone needs $1 million or more in liability coverage, but this short quiz may help determine whether your situation calls for it.

    * Do you have teenagers (especially teens who drive) living at home?
    * Do you employ workers in your home?
    * Do you have a swimming pool?
    * Do you entertain frequently in your home?
    * Do you have a substantial net worth and/or income?
    * Do you serve on a board of directors of an organization that does not indemnify you against accusations of libel and slander?

If you answered yes to one or more of these questions, it may be time to conduct a review of your risk-management strategy to help ensure that you wouldn’t have to sell your home, cash in your retirement portfolio, or use your future earnings to settle a liability claim because your current insurance coverage turned out to be inadequate.

Contact us at 630-548-9600 for additional information regarding Naperville Liability Insurance.

1) Insurance Information Institute, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

Monday, January 3, 2011