Page 11 - AAA Every Day – AAA Hudson Valley – May/June 2022

INSURANCE NEWS
Umbrellas: Not Just for Rainy Days
April showers bring May flowers, but umbrellas aren’t just for shielding us from all that rain. Umbrella policies can shield us from certain risks.
In a world where incidents can often lead to court proceedings, taking out an umbrella policy can cover you above and beyond your personal auto and homeowners insurance liability coverage.
What is an umbrella policy? Consider it an extra layer of protection that would pay out in the event of a liability incident that is considered at fault and exceeds the current limits on your auto or home policy. These policies start at $1 million for excess liability coverage and most insurance carriers require the auto and homeowners to be with the same company, although this isn’t always the case. Even though the coverage amount is high, they are relatively inexpensive with policies starting around $20 per month, depending on the number of exposures.
The following are prime examples of incidents that can happen in our daily lives:
Youthful and new drivers are more likely to be involved in an accident. It could be disastrous if not enough liability is in place on the auto policy. If you or your spouse causes bodily injury, property damage or personal injury to someone else or their property whilst driving, the umbrella policy would kick in once the auto policy liability coverage maxes out. For example: You unintentionally
Shutterstock: MK Photograp55
cause $600,000 of damage in an auto accident. Your auto policy would pay out the maximum limit of your liability coverage (let’s say that’s $300,000), and the $1 million umbrella policy would cover the remaining (in this case another $300,000).
With regards to your homeowners policy, let’s imagine that you own a swimming pool or hot tub. Even with the best-guarded pool with locks, gates and fences in place, someone could still get inside. You may give friends, family or neighbors permission to swim in your pool, play in
your yard or use your yard equipment. What happens if someone gets hurt, or even worse? Guess who’s being held responsible? Once the homeowners policy liability coverage is exhausted, the umbrella policy would then kick in.
There are so many examples of how an umbrella policy can protect us. It’s important to remember to protect your personal assets because, in the event you have insufficient liability coverage, they could be taken into consideration as part of recovering damages. Without sufficient coverage, the DMV could suspend your license or you might have to take out loans (or even another mortgage) to protect your home.
To find out more information on protecting you and your family with this extra safeguard, contact a AAA Hudson Valley Insurance Agent at 518-649-1717 or visit AAA.com/Insurance.
Eman Badr is a Certified Professional Insurance Agent and Manager of AAA Hudson Valley Insurance Agency.
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