Do You Have to be Rich to Get Umbrella Insurance?
Umbrella insurance is personal liability insurance. That is, it gives you protection against lawsuits. It used to be that only people who were wealthy felt the need to buy insurance against lawsuits, but that was when lawsuits were not nearly as common as they are today. People didn’t used to bother suing you if they didn’t think you had a lot of money. It’s still true that the wealthier you are, the more likely you are to get sued. If you get sued, the plaintiff will probably ask for a larger amount based on your perceived wealth. And judges take into account the wealth of the defendant when deciding award amounts. For this reason, most insurance agents would say that you don’t need to purchase umbrella insurance if you don’t have any significant assets. “Significant assets” no longer means you have to be rich, though. If you own a modest home, then that is an asset that could be liable for seizure if you were to get sued.
Your savings account, your boat, and, worst of all, your wages, are all up for grabs. That’s right, even if you don’t have the money to pay a judgment against you, the judge could order up to twenty-five per cent of your wages be taken out of your paycheck every week for years. Certain high-profile jobs can make you especially vulnerable as a target for lawsuits. If you are involved in community service or if you travel a lot, those can also raise your likelihood of needing liability coverage. And anyone can accidentally cause a car crash that results in many people being injured and costs that exceed the liability coverage on your car insurance policy. Umbrella insurance takes care of that too, coming in when your regular insurance runs out. So, no, you don’t have to be rich to need an umbrella insurance policy. If you are rich, then you definitely need one, but even if your means are quite modest you should seriously consider protecting what you have, both for your sake and your family’s, by purchasing liability insurance with an umbrella policy.
