Whether you're driving down a Florida highway or you're watching TV late at night, it's common to see billboards and commercials paid for by litigation attorneys promising their clients hundreds of thousands of dollars in settlements for their injuries. Umbrella insurance can protect you from being the target of one of those settlements or a legal judgment against you. Losing a lawsuit can have serious effects on one's finances. But, before you start your search for umbrella insurance quotes, there are several factors to keep in mind.
Florida Lawsuit Statistics
These are some statistics, according to the Association of Trial Lawyers of America:
- The average compensation payout for injury lawsuits is $60,000.
- The average award in a punitive damage lawsuit is $50,000.
- Plaintiffs win their cases 48% of the time.
- Even if the case isn't a clear win, plaintiffs receive monetary compensation in 84% of cases.
- Automobile accidents account for more than 80% of all umbrella insurance claims.
What Is Umbrella Insurance?
An umbrella policy provides a layer of extra liability insurance, typically $1 million or $2 million, above your home, business and automobile insurance coverage.
While it's easy to assume that only a wealthy person would need that much insurance coverage, you'd be surprised at how important an umbrella policy can be for the average person. For example, if you have a car insurance policy with liability coverage, you may think you have enough protection in case of an accident. But a lawsuit could quickly exceed the $100,000 or $300,000 insurance payout when you factor in court costs and attorney fees.
What Does Umbrella Insurance Cover?
An umbrella insurance policy enhances your current policies with extra insurance, or “excess liability protection.” It can protect you in these situations:
- Bodily injury liability claims
- Property damage liability claims
- False arrest
You may think some of these examples do not apply to you or your situation. However, people, even teenagers, have lost libel cases for comments they made on social media sites. Facebook posts resulting in lawsuits are becoming more and more common.
Umbrella insurance can protect your personal finances from being subject to large lawsuit payouts and can help pay your court costs and attorney fees.
You May Need Umbrella Insurance
You may think that if you don't have $1 million to lose, you don't need an umbrella policy. Unfortunately, if someone sues you for injuries suffered in an accident, you could lose far more than just what you have in the bank.
Your retirement funds, investments, savings and even your future earnings are at risk if a judge allows someone to garnish your wages to pay off a settlement. In some states, the equity in your home can be part of the judgment, forcing you to sell your home in order to satisfy that judgment.
How Much Umbrella Insurance Is Enough?
If you own a house and have a retirement account or other investments, an umbrella policy of $1 million or more should be part of your financial plan. Most insurance companies offer these plans in increments up to $5 million, and some go up to $10 million. The larger policy limits are generally suitable for people who face increased risk for lawsuits such as consultants, landlords, business owners, medical practitioners and those who drive for a living.
The amount of umbrella insurance you should carry depends on how much risk you face and how much you could potentially lose. Consider your risks, your assets and your future earning potential. It may be a good idea to speak with a qualified insurance agent who can help you identify your risks and suggest an umbrella limit that fits your needs.
How Much Does Umbrella Insurance Cost?
The average quotes for a $1 million umbrella insurance policy in FL are $200 annually, which you might find a relatively low price for the ample protection it offers.
Keep in mind, however, that buying twice the amount of coverage by increasing the policy limit to $2 million will not usually double the cost of your premium.
Where To Find Umbrella Insurance
Umbrella insurance is one of those added protections that costs little but can pay off significantly if someone sues you. Knowledgeable, independent insurance agents in the Trusted Choice® network are always available to answer your questions, suggest an umbrella limit that suits your situation and even assist you in filing a claim.
Contact a Trusted Choice agent near you to find out how you can obtain the peace of mind and protection offered by an umbrella insurance policy.