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.
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