Umbrella Insurance: What It Is and How You Can Benefit

Real-World Case Study: Drowsy Driver Puts Lives in Peril

Restless due to many days of unrelenting snowfall, best couple friends, Lori and Scott and Kim and Jay, decided it was the perfect time for a road trip to Las Vegas. After an action packed weekend with many memories made, the four headed home with Scott at the wheel. Before too long he dozed off, awoke suddenly and over corrected, running in to two oncoming cars. All those involved sustained serious trauma including head injuries, lung collapse and multiple major fractures. Two of the injured were airlifted to the hospital for immediate treatment. In addition to hospital stays, recovery would include physical and cognitive therapy. Jay needed extensive reconstructive surgery, too.

Once Scott’s auto liability limits were exhausted, his standalone personal umbrella policy responded to cover their care. 

Claim: $750,000

What you should know…

Liability insurance covers accidental acts that cause bodily injury or property damage to another party. By definition, umbrella insurance is extra liability insurance. It is designed to help protect insureds from lawsuits and/or judgments against, in turn preserving assets and financial nest eggs.  It does this by:

• Providing additional liability coverage beyond the limits of primary homeowners, auto and other underlying insurance policies like boat insurance for instance.
• Some umbrellas can serve as primary insurance for losses not covered by other policies.
• Most umbrellas will cover legal costs for your defense in a court of law.

In the past 12 years at Denver West Insurance Brokers, we have yet to encounter a client who needed to draw upon an umbrella policy. In two instances, however, we have clients who accidentally caused extensive and costly injuries as part of an ‘at fault’ accident. Both came frightfully close to exceeding the limits of their auto policies.

How much does umbrella insurance cost?

An umbrella insurance policy is a very cost-effective and worthwhile purchase. The price is typically between $200 to $300 for the first $1 million of coverage annual, and roughly $100 for each additional $1 million. When you compare this to the rate to hire an attorney – even for one hour – the cost of an umbrella policy is extremely inexpensive. 

Who can benefit from umbrella insurance?

Everyone!  Because accidents DO happen and we are all responsible for injury and property damage we accidentally cause to others.

Give Denver West Insurance Brokers a call to discuss how umbrella coverage can be of benefit to you!