Risk & Business Magazine General Insurance Services Magazine | Page 25

UMBRELLA INSURANCE BY: JOE BIERNACKI CIC, PERSONAL ACCOUNT EXECUTIVE, GENERAL INSURANCE SERVICES J Why You Need an Umbrella Policy ust as an umbrella shields you from the rain, an umbrella insurance policy can shield you from the type of financial disaster that could occur when you least expect it. If the liability coverage on your personal insurance policies covering your home, automobile, boat, or other assets caps out at $100,000 to $300,00 or less—as most all do—then an umbrella policy would kick in with additional coverage of at least another million dollars. An umbrella policy is designed to protect you in that rare event of a serious accident or death for which you are liable. It’s not hard to imagine various scenarios for this to occur, especially if you have a swimming pool in your yard or an automobile in your driveway. The statistics speak for themselves. According to the Centers for Disease Control and Prevention and the International Life Sav ing Federation, about 10 people drown per day in the United States, with 20 percent of these incidents occurring at private homes. When it comes to automobile accidents, the numbers reported by the National Highway Traffic Safety Administration are much more dire, with an average of over 100 fatalities per day in the United States alone. The problem of distracted driving has become a major concern for insurance companies as well as for those sharing the road with drivers who text, check their GPS, eat lunch, or make phone calls while driving. The National Highway Traffic Safety Administration estimates that 10 percent of drivers ages 15 to 19 involved in fatal crashes were in some way distracted behind the wheel—and smartphones are largely to blame. In 2015, the agency attributed an astounding number of accidents—and nearly 400,000 injuries and 3,500 deaths—to distracted driving. As insurance professionals, we deal with these devastating types of incidents all too often, and it’s no myth that they can wipe out a family’s hard-earned assets nearly overnight. That’s why we recommend umbrella insurance policies (or “excess liability coverage”) to our clients—not just those on the wealthier end of the spectrum. A family without umbrella insurance may have a few hundred thousand dollars in coverage, while a severe accident can end up costing several times that amount. Even if you don’t have a million dollars in hard assets to protect—perhaps you have no home ownership or significant financial assets—you most likely have future wages. If you cannot fulfill your obligations to pay out a damages claim from an accident you caused, a portion of your wages could be withheld automatically to help pay out your claim. And if harm is caused to a child in the accident, the claim may remain open—and accumulating—until the minor reaches age 18 or 21. For just a few hundred dollars per year, it’s worth protecting your assets fully through umbrella insurance. Talk to your agent to learn more about this often-overlooked type of coverage. + Joe has worked in the insurance industry since 2000, joining General Insurance Services in 2002. He is currently President of the La Porte Kiwanis Club and a past member of the La Porte Jaycees. In his free time, he enjoys being outside, gardening, hiking, camping, hunting, and spending time with his family. 25