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  • Writer's pictureChristina DeSimone

Umbrella what?

William & Ann live in a gorgeous four bedroom home that they purchased 35 years ago. They live off their minimal retirement and no longer have a mortgage to pay. The house will one day fund their children's inheritance. William & Ann have always had a homeowners policy to cover their home in case of fire, theft or other potential losses involving their home.

On a nice spring day, Ann went to run some errands in her vehicle around her neighborhood. She pulled into the parking lot of her local grocery store, after Ann parked her car , her foot slipped off the brake and hit the accelerator instead. The car went through the wall of the grocery store, continued through the wall of the store and she collided into two pedestrians who were standing in line. Both of the pedestrians were rushed to the hospital due to the severity of the injuries they sustained from Ann's car striking them.

Ann was upset about the accident and did not know what she should do. She called her insurance agent the same day of the accident and her agent took her information to start processing her claim.

Months after the accident, Ann & William found out that the damages filed by the two pedestrians exceeded their auto insurance liability limits that they carried with their insurance company. They found out from their adjuster that they would be personally liable for any money damages which exceeded the liability limits that they carried. The adjuster also told them that the pedestrians attorney did an asset check to see if Ann & William owned property. The attorney found out that they owned a home and would be expecting them to contribute additional monies towards the settlement of the pedestrians claims in addition to the auto insurance liability limits that they carried. The only place they'll be able to come up with the additional funds is from the value in their home.

William & Ann were devastated and did not realize that their home, the most valuable asset they owned, was at stake! They worked all their lives for their home and could not believe that it is at risk due to the accident. What is excess liability coverage or an umbrella policy? This policy would be liability coverage which would exceed your homeowners or vehicle policy for damages you may be liable for. It's what William & Ann would've need to avoid the potential loss of the home they spent their lives working for.

The cost of excess liability coverage or an umbrella policy is very minimal for the amount of additional coverage you would receive. If you own a home and your insurance agency hasn't told you about this coverage, you need to rethink who is handling your insurance needs!

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