Learn the basics of umbrella insurance

According to the National Safety Council, the average economic cost of a car accident is over $78,000 per non-fatal disabling injury and more than $1 million per death. This includes all expenses, such as medical care, vehicle damage, and lost wages. Unfortunately, for most drivers, their insurance may not even come close to covering these expenses.

In New York, for example, the minimum requirements for liability coverage for one person involved in an accident are $25,000 per bodily injury and only $50,000 per death. And who has to make up the difference? The at-fault driver. This is why umbrella insurance can be so beneficial.

What is umbrella insurance?

Just as an umbrella protects you from the rain, an umbrella policy offers shelter from a financial storm. This insurance basically augments your existing auto insurance, but it can be used for home and other forms of insurance as well. While policies vary, umbrella insurance coverage usually starts at about $1 million, which offers significant protection compared to a basic policy.

A legal safeguard, too

Another benefit of umbrella insurance is that it offers financial help in the event of a lawsuit. Even if your liability coverage is enough to cover the initial costs – medical care, repairs, etc. – there could be long-term repercussions.

For example, let’s say you cause an accident with a car driven by an executive chef. In the crash, she hurts her leg. It’s not a very serious injury, but it prevents her from standing for long periods of time for weeks or even months. She may decide to sue you to make up for the salary she loses. And because an executive chef in New York usually makes around $85,000, lost wages can add up quickly. An umbrella policy can pay for any damages you’re responsible for up to the limit of your policy.

Umbrella insurance and your home

While driving presents the best example of how easily accidents can occur, we can’t forget about our homes. Every year, thousands of people are hurt or killed from things that happen in a home, including falls and burns. And, in many cases, the victim is a guest or visitor.

For instance, if a package delivery person trips and falls due to a loose board on your front porch, you could be responsible for the resulting costs. If your dog bites a neighbor and he decides to sue you, you could be looking at thousands of dollars in damages. With an umbrella policy, you’ll know that you will have extensive coverage for any type of incident.

Why umbrella insurance is especially beneficial for landlords

Anyone who owns rental property needs to make sure they have substantial insurance coverage, and this probably should include an umbrella policy. Landlords have an obligation to make their buildings safe for their tenants, and if they are found negligent in this regard, they could face legal penalties resulting in severe financial penalties. Umbrella insurance is particularly important for a landlord if their building is older or has areas that may be hazardous, such as a pool or workout room.

Not sure if you need umbrella insurance?

Get in touch with NICRIS Insurance. We will gladly give you more in-depth information about umbrella insurance and help you figure out if a policy would be in your best interests. You can call us at 516-544-0006 or send us a message through our online contact form.