Don’t Forget Your Umbrella

Last time, I mentioned the idea of buying a million dollar umbrella insurance policy. Let me explain why you should:

A few years ago, I represented a woman who’d been devastated in a head-on collision. The other driver was grossly negligent. He was negligent not only in the way he drove but in the fact that he violated the law that requires that every automobile on the road in Vermont have at least minimum liability insurance. He had none.

Uninsured Motorist Coverage Helps

My client had a pretty standard $100,000 per person, $300,000 per occurrence, liability insurance policy. As I have mentioned, in Vermont, usually uninsured/underinsured motorist coverage is equal to liability insurance coverage. That meant that there was $100,000 to provide for her medical care, lost income, pain and suffering, and disability.

But Not Enough

It was by no means enough. My client also thought she had a million-dollar umbrella policy. Such a policy would have extended the benefit of uninsured/underinsured motorist coverage up to a million-dollar limit.

Forgot the Umbrella

Unfortunately, when her family started looking through their insurance policies, they couldn’t find an umbrella policy for that year. We went to their insurance agent and discovered a sad fact. When it came time to renew their policy for that year, she and her husband had dropped their million-dollar umbrella policy. It would’ve cost less than $150 for that coverage. It would have provided the funds from which to compensate my client.

Her medical bills alone were greater than $100,000. We managed to negotiate a deal with her medical insurer to spit the $100,000. But what she got was a pittance compared to what should have received if there had been adequate insurance coverage.

Don’t Let This Happen to You

Don’t let this happen to you. It costs a little more to have adequate underlying automobile insurance and homeowners’ insurance coverage. Once you have it, a million-dollar umbrella policy is almost free.

With any luck, you’ll never need it. But if need it, you really need it.

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