Insurance and Finance

How the Umbrella Policy Saved Christmas

By Joshua Baethge 11.1.17

Imagine it’s Christmas morning. You go downstairs and turn on the tree lights as the kids dive into their presents. Maybe this is the year she got a new bike and he got a football. It doesn’t take long for them to put on their coats so they can go outside and test out their new toys. You sip your coffee and smile. Everything seems right with the world.

And then it happens. Maybe the sound of breaking glass interrupts the laughter. Maybe the kids try to throw that new football from that new moving bicycle and maybe the football and the bicycle both crash into your neighbor’s new parked car. 

Thankfully, nobody is seriously hurt. However, your property might be, and your brain is already starting to do the math.

It’s times like these when having good insurance really makes a difference. One thing we can predict in life is that the unpredictable will happen a few times along the way. Luckily, the right coverage can quickly turn a costly holiday scare into “everything’s going to be fine.”

When You Need an Umbrella Policy

“Anytime you have a higher risk is when you want to get an umbrella policy,” says Angela Harrison, a Texas Farm Bureau Insurance Agent from Allen.

It always makes sense to be covered by auto and homeowners insurance. But what about damages beyond the liability limits of those policies?

This is where an umbrella policy kicks in. If you are required to pay damages for that car or are found liable for that fall on the stairs and face litigation, the bills might add up and you might find that your basic policies — which can only pay up to a certain amount — are not enough to cover the damages. 

If you decide to be safe and make a trip to the emergency room, adding medical fees into the mix, there’s no telling what the final price tag will be.

That’s when you find you need a backup plan. An umbrella policy gives you the peace of mind that your assets are protected.

When the unpredictable happens, many people find themselves having to pay out of pocket for heavy damages that have capped out their policies — or worse, they find themselves unable to pay out of pocket and face more severe consequences when the courts target their property, investments, and retirement accounts.

In these events, an umbrella policy can protect your assets and even help cover your legal fees

The Best Way to Protect Your Holiday Fun

Harrison recommends umbrella policies for when you are at a higher risk of liability — and when you’re buying new gifts, traveling, and inviting people over to celebrate the holidays, you may find this applies to you. 

Consider some of the things you may purchase for the holidays. A trampoline should provide hours of fun for the neighborhood kids — but accidents happen. And if they happen on your property, you may be found liable.

That adorable new puppy you bought could cause trouble down the road — that little thing wouldn’t hurt a fly, but it’s possible that even the sweetest dog will bite someone if it feels threatened.

Many homeowners policies have very specific requirements about the breeds of dog they will cover, and if you happen to choose one that is not on the approved list, you’re out of luck — unless you have umbrella insurance, which can cover damages applying to dogs of a variety of breeds. So if someone is bitten and decides to take legal action, you can rest easy knowing how your coverage can protect you and your family.

Some Toys Don’t Fit Under the Tree

And they may not fit into your current policy, either. Big items like motorcycles, ATVs, RVs, and drones have the potential to create expensive accidents. Harrison recommends that families strongly consider getting an umbrella policy in addition to their basic auto policies if they purchase one of these items.

“What I find is a lot of people purchase umbrella insurance for added peace of mind, especially with a youthful driver,” Harrison says.

Young drivers account for a disproportionate number of auto accidents. Having an umbrella policy can provide an added level of security in the event something unfortunate happens.

These days, there is a lot of talk about how to protect your gifts before you get them. People have learned how to better defend themselves against theft, fraud, and property damage. But what hasn’t been discussed as much is the need to protect yourself after the presents have been opened. That is when your liability risk actually increases. Nobody is going to fall off that skateboard in the closet, but left on the sidewalk, it is a lawsuit waiting to happen.

Many people have a misconception that umbrella insurance is something only people with significant assets need to have. However, with the way the legal system works today, nobody is truly safe from being the target of a legal dispute. Call your Texas Farm Bureau Insurance Agent to review your needs and your budget to find a solution that works best for you.

Christmas should not be a scary time. You and your family deserve a carefree day of making memories you will all treasure for years to come. Fill your day with gifts and laughter knowing you’re covered under your umbrella insurance plan.

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

© 2017 Texas Farm Bureau Insurance