An umbrella liability insurance policy can provide coverage of $1 million or more towards unforeseen claims or lawsuits filed against a policyholder for personal injury, libel, slander, invasion of privacy, malicious prosecution, and defamation of character or discrimination suits.
"With the average lawsuit award at about $1.4 million, a family's hard- earned assets could be wiped out without an umbrella policy to protect them if someone is injured on their property, in a car accident, or under many other circumstances," said Jim Hyatt, personal lines president at The Hanover. "Most people just don't believe they will be sued. But, unfortunately, our society is more litigious than ever and many people have much more to lose than they even realize."
Why Umbrella Insurance Matters
While it is common for homeowners to carry $300,000 in liability insurance through their standard homeowner's policy and $500,000 in liability insurance through their standard automobile policy, these coverages often are not enough to protect their assets when a personal injury award is handed down against them in a lawsuit.
A typical $1 million personal umbrella liability policy, which can cost about $150-$200 a year for a typical family with two cars and a home, can:
- Cover defense costs in a lawsuit
- Protect against settlements that can take away someone's accumulated wealth or savings or even garnish a person's earnings
- Extend coverage to the policyholder while they are using boats, snowmobiles and other recreational vehicles
- Cover the policyholder anywhere in the world
"Consulting an independent insurance agent is the best way for individuals and families to determine whether an umbrella liability policy is right for them and if so, the appropriate level of coverage they should consider for their personal needs," said Hyatt. "For less than the price of a cup of coffee a day, many people will prefer to live with the peace of mind that their assets are protected."
