What Is an Umbrella Policy?

What Is an Umbrella Policy
I've recently had several clients inquire from me what an umbrella policy is and if they have one. If you've got assets that you want to guard from an unexpected lawsuit, you almost certainly need an umbrella!

Imagine that you simply are driving in an unfamiliar city in the dark . it's dark and rainy and you are not certain the way to return to your hotel. You stop at an intersection and appearance both ways, while taking note of the directions on your GPS system. Traffic is obvious so you switch . Unexpectedly, a drunken pedestrian steps into the road as you're turning. you can't stop in time and hit the person. Panic sweeps over your body as you imagine the worst.

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The pedestrian could invite you to pay medical bills and lost wages. If they're disabled and may not work as a results of their injuries and are the breadwinner, the pedestrian's family could sue you because they're not ready to provide the family an income. Would your auto insurance be enough to hide what the casualty might ask for? Would you've got other assets in danger if your auto insurance couldn't meet their demand? (Your home, bank accounts, retirement plans?)

If your auto liability limit is that the Illinois state minimum, it'll pay a maximum of $25,000 to the casualty . this is able to probably not cover the value of surgery if they needed that as a results of injury from the accident. The casualty could seek an attorney to sue you and your personal assets might be in danger . Or, your wages might be garnished to assist pay the settlement.

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Would you be comfortable with a court withholding money from your paycheck to settle a lawsuit? Or possibly forcing you to sell your home to settle with the injured party? Would you be comfortable liquidating your bank accounts to settle with the injured party?

Worse, if the person dies and leaves a family behind, you want to consider that they're now without their primary earner . This presents an enormous financial burden to the family, which a court could hold you liable for .

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You could add an umbrella liability policy to offer you additional liability coverage for a minimal annual cost. Most umbrella policies start at a price of $150 per annum for $1 million of coverage. this sort of policy protects your assets from a lawsuit and protects you from the unnecessary stress of an unfortunate situation.

Know more details please visit on Wikipedia