Insurance and Finance

How an Umbrella Policy Keeps Your Finances Above Water

By Valirie Morgan 8.17.16

When it rains, it pours, so it only makes sense to get out an umbrella. Just like an umbrella protects you from a sudden shower, an umbrella policy protects you and your family’s finances from being wiped out in a lawsuit — and it’s more of a risk than you might think.

Don’t get caught in the rain

Imagine you’re driving down the highway when traffic slows and you’re forced to slam on the brakes. Your car rear-ends the vehicle in front of you, seriously injuring the passengers inside. They sue you for $300,000.

Maybe you’re throwing a birthday party at your house when a guest dives into the shallow end of the swimming pool, breaking his neck. He sues you for $1 million.

Let’s say your dog gets loose and attacks a child, causing bite wounds and scratches to their legs and arms. The parents sue you for $1.5 million.

How are you going to be able to pay that judgment? Your homeowners or auto policy will likely cover a small part of it, but with a price tag that large, you’re stuck footing most of the bill. All it takes is one serious accident to do away with all of your finances.

Stand under the umbrella

Umbrella insurance is designed to protect you beyond the liability limits of your other policies, such as homeowners and auto. While you may think it’s something only wealthy people need, think again: Owning a house, a car, firearms, a dog, or even a trampoline are all things that put you at risk of being personally liable in the event of an accident.

Additionally, umbrella insurance might cover you for libel and slander. It’s rare, but there have been instances in which people were sued for derogatory comments on social networks and blogs. Even if the lawsuit is dismissed, an umbrella policy can help cover the legal expenses from such a suit.

With an umbrella policy, the additional liability coverage can provide valuable peace of mind that your savings and your family’s financial future are protected.

Learn more in our guide to the benefits of umbrella insurance, and talk to your Texas Farm Bureau Insurance Agent to determine the amount of coverage that’s right for you.

Coverage and discounts are subject to qualifications and policy terms and may vary by situation.

© 2016 Texas Farm Bureau Insurance