You might wonder about the insurance with a funny name that your Great Michigan Insurance agent keeps recommending umbrella insurance. We always tell our Marshall, MI clients about umbrella coverage because it benefits everyone. It can mean more the closer you get to retirement age though.
Why Umbrella Coverage Becomes More Important
When a court or police find you at fault for an accident or injury to another person, you pay damages to that person. Your liability insurance covers you, but only up to the coverage limit.
Let’s say that you cause a car accident that involves a single vehicle with four people inside. Each person sues you for damages. The court awards them each $50,000. The state mandates you carry auto insurance liability for $20,000 per person with a total payout of $40,000. That means your auto insurance pays $40,000 of the $200,000 you owe. You must pay the other $160,000 out of pocket.
If this happens when you’re 30, you clean out your retirement fund and your savings account. You liquidate some stocks, and you pay it off. You have 35 years before you even think about retiring, so you have time to make up the money you had to payout.
If this happens when you’re 55, you suddenly have $160,000 of savings to make up, plus the money you would normally have saved up during that decade. You could also delay your retirement.
Without umbrella coverage, a single accident or lawsuit can exhaust your auto or home coverage. The remainder of the settlement comes out of your pocket. You may have to empty your savings and retirement fund to pay the settlement with little time to rebuild the fund before retiring.
That makes umbrella insurance a much smarter investment. These policies cost little compared to typical main insurance policies. An umbrella policy is a supplementary policy, so you must purchase the main policy such as home or auto before you can purchase an umbrella policy.
Contact Great Michigan Insurance today to find out how you can add an umbrella policy to your Marshall, MI home or auto coverage. Don’t delay; call us today.