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Do I Need An Umbrella Policy?

Do I Need An Umbrella Policy?

We live in a litigious society, and for most families, it would be financially devastating to encounter a lawsuit. If you want to protect your assets, an umbrella policy could provide the additional coverage you need.

What does an umbrella policy cover? 

An umbrella policy gives additional liability protection. If someone tries to sue you, this policy picks up where your Texas homeowners or car insurance coverage stops. This coverage includes everything from legal fees to the settlement costs associated with a lawsuit.

Umbrella insurance also covers litigation prompted by:

  • Rental property conflicts
  • False arrests or malicious prosecutions 
  • Defamation of character
  • Damages for suffering and pain 


So who needs extra coverage?

If you're concerned about keeping your existing net worth and future earnings protected, it may be worth considering an umbrella policy. People with substantial assets often set up umbrella liability insurance to shield themselves in the event of a lawsuit, but wealthy policyholders aren't the only ones at risk. If you don't have significant assets, the court can target your future earnings to pay off any damages.


So how much coverage do you need?

Umbrella policy premiums are relatively reasonable compared to what it would cost to have your assets drained. But the more you have to safeguard, the larger the policy you may need.

To figure out how much coverage you need, first evaluate all savings, retirement accounts and physical property. Then, calculate what the potential loss of your future income would be. Finally, add these amounts together to form an idea of your potential coverage amount.

No matter how much you have or don't have, an umbrella policy can help you protect your current and future wealth. Feel free to reach out to one of our Insurance Experts at the Thumann Agency if you have any questions or call 972.991.9100