Our Litigious Society
There are over 15,000,000 civil lawsuits filed in the US every year. This comes to over 41,000 per day, 1,708 per hour and about 1 lawsuit every 2 seconds. Every day there are millions of dollars in court awarded damages paid to families, business owners and anyone else who has been financially or physically damaged at the hands of a negligent party. In cases where the plaintiffs are not awarded, the defendant or alleged negligent party spends thousands in legal fees just to put up a defense.
So, why does any of this matter to you? Admittedly, none of us have a crystal ball. In the event that you hit that mini-van full of kids, or that budding brain surgeon, the court and an aggressive attorney are not going to give you a break, regardless if the incident was accidental or not. Luckily for all of us, there is a cost-effective way to protect ourselves, our assets and our families. The solution is to purchase Excess Liability, better known as an Umbrella Policy. Excess Liability is a type of insurance coverage that you can purchase for personal, or business purposes that offers an additional limit of liability protection which extends over and above the base limits offered by your underlying home and/or auto insurance policies.
Everyone Needs Excess Liability (Including People Who Don’t Think They Have Assets)
A common response from most people who don’t fully understand the product is likely, “I don’t have assets or anything to protect. I don’t need this kind of insurance.” Here’s why this view is flawed. The courts define an asset as anything that can be liquidated into cash. Your house(s), car(s), electronics, financial investments, bank accounts, anything and everything that is owned by you or titled in your name can be up for grabs. In addition to all of these items, your current and future earnings can also be at the mercy of the courts through wage garnishment. If you have a job and aspirations of success, you have plenty to protect in the present and the future.
While the likelihood of you ever being involved in an incident that exhausts your underlying home or auto liability limit is remote, it is possible. Once your limits are exhausted, you will be on the hook for the rest. That means any additional damages that may be awarded and any additional legal and court fees continuing your defense will be coming out of your pocket too.
Below are actual claims that our clients have experienced, and their Personal / Excess Liability coverage has paid:
- Client A was heading home from work when he collided with a motorcycle. The motorcyclist was thrown from his bike and died shortly thereafter. The family members and the estate of the deceased motorcyclist filed a claim against Client A for wrongful death, medical payments and damages. Claim Reserves have been set at $1,000,000.
- Client B was wrestling his friend at a golf course when Client B accidentally injured his friend’s neck. The friend filed a claim against Client B for medical expenses, disability, lost wages, rehabilitation and damages. Total Claim Payment was $492,500.
- Client C was riding his bike along a bike path when he passed a pedestrian power walking. While passing each other, the pedestrian merged into the path of Client C and the two parties collided. Both parties experienced injuries as a result of the accident. The pedestrian filed a claim against Client C for bodily injury, medical payments and damages. Total Claim Payment was $450,000.
On average, an Umbrella Policy pricing starts at $170 for 12 Months for a $1,000,000 Limit. Depending on the variables of you or your family’s risk, pricing goes up from here, but not by much. Variables that play into the increase of premium are as follows:
- Number of Vehicles & Drivers/Youthful Drivers in the Household
- Number of Properties Owned or Rented
- Swimming Pool &/or Trampoline
- Owning a Dog, depending on its breed