Liability insurance can prevent many lawsuits from causing you large financial losses by covering your legal fees, court costs, and damages. It is an important component of many types of insurance policies including home, auto, landlord, auto, and business insurance.
However, most insurance companies impose caps on how much liability coverage you can purchase with your policy. What if this cap isn’t high enough for your comfort? This is where umbrella insurance comes in. A local independent insurance agent can help you find an affordable umbrella insurance policy in Colorado.
What Is Umbrella Insurance?
Umbrella insurance protects you with a layer of extra liability insurance. Policies typically offer at least $1 million in additional coverage above what your home, auto, or business insurance can provide. Umbrella policies kick in where your other policies leave off so that you don't need to worry about liability costs that exceed your insurance coverage limits. Though you might think that only a wealthy person would need that much insurance coverage, if you have assets like a home, investments, or savings, you risk losing them all if a judgment against you is much higher than what your standard insurance policies will cover.
How Much Does Umbrella Insurance Cost in Colorado?
Because umbrella insurance only pays after your primary policy has reached its coverage limit, these policies do not carry a high risk for insurance companies. As a result, the cost of umbrella coverage is very affordable. The average $1 million policy in Colorado is just $200 a year. Of course, rates can vary according to the types of coverage you are buying and details about you and anyone else who may be covered on your policy. A policy will cost more if you have two teen drivers in your household than if you live alone.
What Does Colorado Umbrella Insurance Cover?
An umbrella insurance policy enhances your currently held liability coverage with extra insurance, or “excess liability protection.” It can help to cover the cost of:
- Bodily injury liability: If you are responsible for severe injuries to someone else, such as if you cause an accident while driving, boating, skiing, or hosting a party.
- Property damage liability: If you are responsible for someone else suffering expensive property damage, such as if you lose control of your car on an icy road and strike several parked cars, or if a dead tree on your property falls onto your neighbor’s house.
- Business liability: If a liability claim against your company exceeds what your policy will pay, such as if beer produced at your brewery causes several people to become ill, or if the ceiling of your retail store collapses and injures several customers.
- Charges of libel and slander: If you find yourself on the wrong end of a liability lawsuit due to a negative review you posted about a business, or because you wrote untrue information about someone on your blog.
Any insurance policy you currently have that includes liability insurance can be enhanced with an umbrella insurance policy.
Why You May Need Umbrella Insurance
You may think that if you don't really own that much, you don't need the added coverage that an umbrella policy can provide. Unfortunately, if you are sued in an expensive liability lawsuit, you may find yourself facing losses you simply cannot afford. If you have a car insurance policy, you will likely have enough liability coverage to pay for most accidents. However, if you cause a collision in which there are fatalities, your liability costs can easily exceed what your auto insurance policy will cover. In this case, your retirement funds, investments, savings, and even your future earnings could be at risk if a judge allows the plaintiff to garnish your wages to pay a settlement. Basically, if you have a lot to lose, you should strongly consider umbrella insurance.
How Much Umbrella Insurance Do You Need?
If you own a house, have a lot socked way in a retirement account, or have other valuable investments, an umbrella policy of $1 million or more should be strongly considered as part of your financial plan. Most insurance companies offer umbrella insurance in increments of $1 million in coverage, in some cases up to $10 million in total protection. Policies with very high coverage limits are usually ideal for people who face increased risks of liability lawsuits, such as consultants, landlords, business owners, and those who drive for a living.
The amount of umbrella insurance you need depends on how much risk you face and how much you could potentially lose. A financial advisor or an experienced insurance professional can help you assess your risks and can suggest a coverage amount that is appropriate to fit your needs.
Let an Independent Insurance Agent Help
Local independent agents are ready to assist you with all of your insurance coverage needs, including umbrella insurance. These agents work for you, not for a specific insurance company, so they can shop around to aid you in your search for the best and most affordable policy to meet your coverage needs. There are more than 250 independent agents in Colorado who are ready to help. Find an insurance agent near you to learn more and to start comparing customized umbrella insurance quotes.