Arizona residents need only to see the billboards along state highways or late night commercials promising millions of dollars in legal settlements to wonder why they didn’t get legal help when filing a lawsuit. And what happens when they find themselves on the wrong side of a court case? Only a comprehensive umbrella insurance policy can protect your assets and future earning potential from being the subject of garnishment or a settlement should you cause another person's injury or death. Before you search for umbrella insurance quotes, however, there are several factors to consider.
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High-Dollar Lawsuit Results in Arizona
In today's litigious society, it is not uncommon to see multi-million dollar awards in lawsuit settlements and judgments. Here is the short list for Arizona:
- A 26-year-old woman who suffered from severe developmental delays drowned in a bathtub after a caregiver left the woman unsupervised. A jury awarded her family $45.5 million.
- An AZ lab misread a 27-year-old woman's Pap smear as normal. The error became apparent after she fell victim to cancer. However, the mistake by the lab caused a delay in her diagnosis and treatment, resulting in the cancer spreading to other organs. The woman died, and the family received a $2.5 million settlement.
- One AZ defendant, intoxicated while traveling at 72 mph (32 mph over the speed limit), ran a stop sign and T-boned a truck killing the other driver instantly. The defendant survived with minor injuries, and a jury ordered the man to pay $1.6 million to the family of the deceased.
- A 16-month-old baby drowned in the backyard swimming pool of a home. He got out of the home through a doggy door. The owner (landlord) failed to install a pool fence or door alarms as required under AZ law. The case settled for $1 million before survivors even filed a lawsuit.
What Is Umbrella Insurance?
Umbrella insurance is a type of extra liability insurance that will supplement your basic Arizona liability policies, such as your auto, home or business insurance. An umbrella liability policy covers a much higher liability limit that goes beyond claims directly relating to your home and auto.
The primary function of an umbrella policy is to protect your assets from an unforeseen event such as an accident in which you are responsible for damages, bodily injury or death. If you must pay damages due to a settlement, judgment or jury award, your umbrella coverage will pay the damages, up to the policy limit.
What Does Umbrella Insurance Cover?
An umbrella policy provides additional coverage or excess liability above the limits of your basic insurance policies. It can protect you from bodily injury liability claims and property damage liability claims. Umbrella policies also provide a broader form of coverage and can help cover legal fees, false arrest, libel and slander.
The following types of situations are common in Arizona, but an umbrella insurance policy can protect your assets and future earning potential from being subject to financial ruin due to these risks:
- Professional liability: Psychologists, financial planners and investors are just some occupations that take advantage of an umbrella insurance policy to cover professional liability. A professional liability or business umbrella policy is extra insurance that supplements existing business liability policies. A business umbrella policy differs from a personal umbrella policy by focusing on specific liabilities businesses face such as “errors and omissions,” meaning advice or consultation that results in a loss for the client.
- Auto accidents: Personal injury lawyers are good at winning high dollar payouts for clients injured or killed in traffic crashes.
- Landlord liability: Landlords face lawsuits from tenants and even delivery persons and guests for injury and wrongful death.
- Dog bites: Even small breeds can cause significant damage to others, and high value settlements resulting from dog bites are common in Arizona.
- Product liability: For business owners of manufacturing or drug companies, product liability protection is often insufficient to protect their finances against class action lawsuits. Should one of your products or drugs cause illness or death, an umbrella insurance policy could protect your business from financial ruin.
Who Should Buy Umbrella Insurance?
It may be easy to assume only the wealthy need an umbrella insurance policy, but those with less to lose often have more to gain from the added protections. About 85 percent of umbrella insurance claims stem from traffic accidents, and no one is immune to those. The following people, however, may want to seriously consider an umbrella insurance policy:
- Small, medium and large business owners
- Professionals in the medical, law and consulting fields
- Landlords and commercial property owners
- Dog owners and breeders
- Manufacturers and drug makers
How Much Umbrella Insurance Should You Carry?
As you review the options for umbrella insurance from Arizona providers, you should consider the following factors in determining which limits to set:
- Your risks: A landlord faces a higher risk of lawsuits than a single-family homeowner simply because rental property generally has more foot traffic on a daily basis. While a homeowner may find sufficient coverage with a $1 million umbrella policy, a landlord may want to consider a $5 million policy limit. Similarly, a business owner may want to consider more umbrella protection than someone who works for an employer.
- Your assets: These include properties, possessions, stocks, bonds, savings and retirement funds. The more assets you have to protect, the higher the umbrella policy limit you should consider.
- Your future income: It is not uncommon for lawsuits to result in wage garnishment and the seizure of future assets. If you are on track for a high paying career, a lawsuit filed against you could include money you haven't even earned yet.
What Will Your Umbrella Insurance Quotes Look Like?
You may be surprised to learn how affordable umbrella insurance policies can be when you start reviewing quotes. Most Arizona insurance companies offer these plans in increments of $1 million, up to $5 million, and some go up to $10 million in increments.
Insurance companies require specific levels of liability coverage on your auto and home insurance policies before they will give you quotes for an umbrella policy. These are typical levels in Arizona:
- $300,000 per occurrence for personal liability, bodily injury and property damage liability on your homeowners insurance policy
- $250,000 per person for bodily injury and $500,000 per accident on your car insurance policy
- $100,000 per accident for property damage on your car insurance policy
You may need to review your current liability insurance policies to find out if they meet these requirements. The average quote for a $1 million policy is $200 annually, which you might find to be a relatively low price for the peace of mind and security it offers.
It's also important to remember that double the coverage doesn't always mean double the premium. You can easily find a $2 million umbrella insurance policy in Arizona for less than $300 a year.
How To Find Umbrella Insurance
Plaintiffs file lawsuits every day in Arizona. While it's important for victims and their families to receive compensation for injury or death, it is equally important for you to protect your financial ability to provide for yourself and your family. Knowledgeable, independent insurance agents from the Trusted Choice® network are always available to answer your questions about umbrella insurance, suggest coverage limits and even assist you in filing a claim.
Contact a Trusted Choice agent near you to find out how you can get umbrella insurance protection that meets your needs and budget.