Questions about Umbrella Insurance?
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Umbrella Insurance Policy in Fort Worth, Texas
Accidents happen, and sometimes they are inevitable. Having a protection blanket in the form of liability insurance can really save you and your family from financial mishaps. We’d like you to think of umbrella insurance as this added blanket of protection. It is a form of personal liability insurance that can protect you from slander, false imprisonment, and slander. The primary purpose of umbrella insurance is to protect your assets against any lawsuits that may be brought up against you.
So, is umbrella insurance essential in Texas? Let’s discuss two examples of how umbrella insurance in Texas can benefit you.
- It adds extra-legal liability cover should you have a firearm related accident. Gun insurance is a separate matter on its own. Homeowners’ insurance treats firearms as personal property, and in cases of an accident, your homeowners’ insurance would help you out. However, hurting someone on your property is getting into murky waters, in which case you might find refuge with extra liability coverage through umbrella insurance.
- Liability cover for personal injury. If you injure yourself in a car accident, then the cost of ongoing medical care starts to stack up. Fortunately, umbrella insurance can ensure your medical bills and wage loss by up to 1 million dollars.
So, How Does This Form of Liability Insurance Work?
As we mentioned before, if you have homeowners insurance, then you’ll receive a certain amount of personal liability, this is what we call the personal liability limit, and it can vary from $50,000 to $100,000 or more. To understand how umbrella insurance works, we will look at a common scenario. Let’s say you hit an expensive car i.e., Mercedes, which has a total repair cost of $30,000. The owner of the car sustains an injury and thus needs time to recover. As the car owner won’t work for a few months, they decide to sue you for bodily harm and wage loss for $400,000. In addition to this, you are also required to pay for their medical bills, which can rack up to an estimate of $50,000.
If you have a comprehensive auto insurance plan, then the good news is that it will have some personal liability coverage, which can vary from $100,000 to $200,000. Looking back at our example above, the total amount owed to the person injured is $480,000, of which only $200,000 will be covered by your auto insurance.
So, how are you going to pay off the rest of the $280,000? When you reach and exceed your personal liability limit as provided by either your homeowners or auto insurance, then that’s when the umbrella insurance policy comes in. In our scenario above, your umbrella insurance would cover the excess owed to the injured individual.
How Much Does Umbrella Insurance Cost in Texas?
Now that we’ve convinced you about the importance of umbrella insurance let’s briefly discuss the average cost. This form of liability policy is sold in increments of $1 million, but don’t worry, you don’t need to pay $1 million up-front. The cost of an umbrella insurance policy will vary state-to-state, and several factors may increase your yearly payments. In general, we’d like to say on average, umbrella insurance for your first $1million coverage will range anywhere from $100 to $350 a year. If you have a lot more assets, such as multiple homes, cars, and other forms of investments, you can expect the yearly cost of your liability coverage to increase. When an insurance agent calculates your umbrella insurance’s total yearly cost, they will consider your net worth (which includes all your assets subtracting your debts), the total value of your retirement plan, home equity, and the state you reside in, to name a few.