What Is An Umbrella Insurance Policy? Who Needs One?

What Is An Umbrella Insurance Policy? Who Needs One?
What Is An Umbrella Insurance Policy? Who Needs One?

Imagine making the short drive to your local grocery store. It’s a drive you’ve made so many times that you’re practically on auto pilot. So much so that you don’t see a young man riding his motorcycle towards you and you turn in front of him. The accident sees him life flighted to the hospital where he’s in the ICU for several days. He survives, but his injuries are significant, his ability to provide for his family is in jeopardy, and full recovery seems out of the question.

Who will pay his medical bills? What about pain and suffering? Your auto insurer is responsible for the injuries sustained, but there has to be a limit, right? What if you selected state minimum coverages when you purchased auto insurance? In Ohio, that’s $25,000 per person to pay bodily injury. Or, your agent recommended limits of $100,000 or even $300,000 -- surely that’s enough?

In this example, even $300,000 wouldn’t be enough. If you don’t have an umbrella policy, you could be responsible for whatever your auto policy doesn’t cover. Imagine your home and personal assets at risk. Because without an umbrella, they are.

Put simply, an umbrella policy is a layer of liability that is excess over your home and auto insurance. Generally, umbrella policies are available in increments of $1MM. They provide a layer of protection against significant claims that could result in financial devastation.

The story at the beginning of this article is true.  The young man on the motorcycle is a dear friend of mine and fellow pastor of our church. He has 4 young kids, and a 5th on the way. His life will never be the same. And accidents like this happen every day. Are you properly protected? Or are you risking everything?

I’d be happy to review your home and auto insurance to make sure you are properly protected. And don’t be tempted to think you can’t afford an umbrella policy. Lots of factors determine the price but, generally, an umbrella policy will only cost between $125 and $200/year, for each $1MM layer.

You’ve worked hard to be wise with your money, pay down debt, invest well, and build wealth. Why risk everything, when adding an umbrella policy is only a phone call away?


Author: Seth Buckwalter  - Account Executive


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Wooster, OH  44691

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Whitaker-Myers Wealth Managers, LTD is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.