Umbrella insurance is often considered a necessary investment for those looking to protect their finances and assets in case of unexpected accidents or lawsuits. But is it really worth the cost? We asked experts to weigh in on the benefits of umbrella insurance and whether or not it’s worth the investment.
According to Mike Fierro, an insurance agent with Fierro & Kori Insurance, umbrella insurance is a smart investment for those who want to protect themselves beyond their basic liability coverage. “Umbrella policies provide excess liability coverage over and above a person’s auto and home insurance limits,” he explained. “This extra layer of protection can be critical in the event of a catastrophic accident or lawsuit, as it can help protect a person’s assets and financial well-being.”
Fierro also noted that umbrella insurance can provide coverage for incidents that may not be covered by other policies. “For example, if someone sues you for slander or defamation, umbrella coverage can help cover the legal costs and any damages awarded,” he said. “It can also provide coverage for incidents that may not be covered by your auto or home insurance, such as a boating accident or a dog bite.”
Mark Herman, president of Herman Insurance Services, agreed that umbrella insurance is a worthwhile investment for those who want to protect their assets. “The more assets you have, the more important it is to have umbrella insurance,” he said. “Even if you have a modest income, if you have substantial assets, you are a target for a lawsuit.”
Herman also pointed out that umbrella insurance can be relatively inexpensive. “For a few hundred dollars a year, you can get a million dollars or more in coverage,” he said. “Considering the potential financial impact of a catastrophic accident or lawsuit, that’s a small price to pay.”
However, not all experts agree that umbrella insurance is a necessary investment for everyone. “It really depends on your individual circumstances,” said Ryan Shea, a financial advisor with Shea WealthCare. “If you don’t have substantial assets or a high risk of being sued, you may not need umbrella insurance.”
Shea also noted that some policies may have exclusions or limitations, so it’s important to read the fine print before investing in umbrella insurance. “Make sure you understand what is and isn’t covered by your policy,” he advised. “And be aware that some policies may require you to have certain levels of underlying insurance coverage, which can add to the cost.”
Overall, the consensus among experts is that umbrella insurance can be a smart investment for those looking to protect their assets and financial well-being. However, it’s important to consider your individual circumstances and read the fine print before making a decision. If you’re unsure whether or not you need umbrella insurance, it’s always a good idea to consult with a trusted insurance agent or financial advisor.