Several years ago I wondered the same thing myself. I didn't have a lot, but I did own my own home. Was that enough of a reason?
According to Safeco Insurance, one of the carriers we represent -
Well, that right there includes most people. But you're probably not seeing a compelling reason to buy umbrella insurance. Here are a few actual claims that may provide more insight.
- Jill, the owner of two dogs, had a friend and her young children over for dinner. A child tripped and fell into the bed of one of the dogs as it was sleeping. The do growled and bit the child's face and ear, causing injury and permanent scarring. While Jill's homeowners policy covered a portion of this liability, she did not have an umbrella policy so she had to cover the remaining costs from her personal assets which put her in significant debt.
- Tom was driving his car through an intersection at 25 miles per hour and accidently struck a pedestrian in a crosswalk. The pedestrian's injuries were severe and rehabilitation was expensive, including brain surgery and a stay in a rehabilitation facility for around-the-clock care. Tom's umbrella policy with a $1 million dollar limit covered this claim in its entirety.
- Mary didn't see the motorcycle coming and pulled out, causing the motorcyclist to hit the side of her car. The motorcyclist sustained severe injuries that required multiple surgeries and rehab. The substantial claim was well over her auto policy limits but was covered by her umbrella insurance.
Are you thinking, "hmmm...maybe this could happen to me, but oh well, you can't get blood from a stone."? Did you know that lawsuits arising from situations like those above can go after your assets including home, car, future earnings, and more? A $1,000,000 umbrella policy typically costs less than $200 a year. Is not buying umbrella insurance worth the risk? It isn't for me.