The Invisible Hand of Umbrella Insurance: Because Who Doesn’t Want More Protection? 

Who doesn’t need an umbrella in the rainy PNW? Just like a physical umbrella protects you from unexpected downpours, umbrella insurance offers a financial safety net. So, what is umbrella insurance? It’s broad coverage that fills in the gaps left by your existing policies. For example, with your auto insurance, if you’re in an accident and face a lawsuit exceeding your liability limits, an umbrella policy can help protect your assets. With home insurance, if someone gets injured on your property and the damage exceeds your coverage, an umbrella can cover the difference. Even for renters insurance, an umbrella policy can provide additional liability protection, ensuring you’re covered in unexpected situations. 

This guide will give you a clear picture of just how rainy life can get—and why a good umbrella (policy) is worth its weight in gold! 

What Exactly Is Umbrella Insurance and Why Should You Care? 

Let’s start with the basics: What is an umbrella policy? It’s a form of personal liability insurance that kicks in when your existing auto, home, business or renters coverage doesn’t cover the full cost of damages or legal fees for which you are liable. 

Now, you may be asking, why should you care? Well, imagine this: You’re hosting a barbecue, and a guest trips and takes a nosedive down the stairs. They sue you for medical expenses, pain, and suffering, amounting to $1.5 million. Your homeowners insurance covers $500,000 in liability. 

That’s a million-dollar gap you’re now expected to fill. Enter umbrella protection. It swoops in to cover the remaining liability, protecting your savings. And your sanity. 

The Nuts and Bolts of Umbrella Insurance: What Does It Cover? 

So, what does umbrella insurance cover? It’s not just about saving your wallet from major lawsuits or freak accidents. This type of protection can also protect you from things like: 

• Bodily Injury Liability: Covers the cost of injuries to others, such as medical expenses, that exceed your primary policy limits. This could apply to car accidents, slips, and falls, or even a neighbor’s unfortunate encounter with your dog. 

• Property Damage Liability: Helps cover damages to someone else’s property. For example, causing a car accident that destroys someone’s fence or being found liable for significant damage to a neighbor’s home. 

• Legal Fees: If you find yourself tangled in a lawsuit, even if you win, legal defense costs can be steep. Umbrella coverage can help cover these expenses. 

• Personal Liability: You might not think it’s possible to get sued for libel or slander, but in today’s digital age, one ill-advised post could land you in hot water. Umbrella insurance extends coverage for certain lawsuits not covered by your other policies. 

In other words, these policies fill in the blanks between your other insurance plans. 

Real-Life Scenarios Where Umbrella Insurance Kicks In 

Picture this: It’s another rainy night in Washington, you’re driving and you rear-end a luxury sports car. Or the newest Tesla. Maybe the Cybertruck? Well, now you’ve exceeded your auto policy’s liability limits, and the driver is also coming after you for medical fees and lost income because they couldn’t work for a period of time. 

Thankfully, you have umbrella coverage, and the extra liability falls under its terms—which means you don’t have to dip into your 401(k) or IRA to cover the gap. 

Umbrella Insurance for Auto: Because Car Accidents Are So Yesterday 

Washington state’s mandatory auto insurance law states that you need one of the following at minimum to stay legal while you’re on the road: 

• Liability Coverage: You need $25k for liability related to another person, $50k for injuries to all other people, and $10k for property damage. 

• Certificate of Deposit: You can get one of these by applying for a certificate from the WA government. 

• Liability Bond: Get a liability bond of $60k minimum from a surety bond company. 

• Self-Insurance: Cover your costs after receiving approval from the state government. 

Let’s say you get the minimum coverage (25k/50k/10k). That’s easy to burn through if you get in a bad accident. With umbrella coverage, you can add anywhere from $1 million to $10 million in additional liability protection, ensuring that you’re not left footing the bill if a serious accident occurs. 

Home Sweet Home: Umbrella Insurance for Your Castle 

In this rain-soaked region, not only is having this policy for your home important but so is knowing how much coverage you need. For example, if a contractor is injured (slipped on your rainy roof) while working on your property and sues you for medical expenses and lost wages. Your umbrella insurance kicks in when your homeowners policy reaches its maximum, saving you from a financial catastrophe. 

Renters, Rejoice! Why Umbrella Insurance Isn’t Just for Homeowners 

If you’re a renter, you might assume you’re immune to large liability claims since you don’t own your property. Think again. Affordable renters insurance in Washington provides some liability coverage, but excess liability insurance goes the extra mile by protecting against more severe claims. It’s not a bad idea to have it if you’re going to rent an apartment. 

How Much Is This Going to Cost Me? Spoiler: It’s Not as Bad as You Think 

The burning question: How much umbrella insurance do I need? Generally, it’s recommended to purchase an amount that matches your net worth or more. If your net worth is $1.5 million, consider a policy that covers at least that amount. Most insurers offer policies starting at $1 million, with additional coverage available in increments. 

So … How much does it cost? These policies are surprisingly affordable. For a $1 million policy, you can expect to pay about $150 to $300 annually. Each additional $1 million in coverage usually costs around $75 to $100 more. When you compare this to the potential cost of a lawsuit, it just makes sense! 

Get Started with a Free Quote 

At the end of the day, protecting yourself from liability means you need the most durable umbrella possible. And a good policy can go a long way toward giving you that. An agent can also help you make the right decision based on your personal financial situation. 

Ready to get going with your own umbrella insurance quote? At Vern Fonk, we’re here to help. Get your free quote online, request more information at an office near you, or give us a call today at (888) 403-0555 to chat with a friendly representative. We’re here to clear up your questions!