Umbrella insurance is perfect for a rainy day.

And you better believe, if it starts to rain, it can really pour.

You purchased homeowners and auto insurance and feel comfortable knowing that you went with higher limits on both so you’re well protected… you think.

But then the unforeseen happens. Your neighbor’s child, playing with your child, falls from the tree house in your backyard. The neighbor’s child suffers multiple broken bones, requiring complicated surgery and a long recovery. Your neighbor sues, seeking reimbursement for medical bills, pain, suffering, and lost wages for all the time the child’s parents have had to spend away from work during the child’s recovery. The damages sought far exceed your coverage limits.

Or you’re driving on a highway during rush hour and don’t realize the traffic in front of you has stopped. You slam on the brakes, but not in time. You cause a three-car pileup and are sued by multiple parties for vehicle repair, medical bills, lost earnings, pain, and suffering. Your auto insurance limit does not come near to covering it all.

Financial responsibility beyond your insurance policies falls squarely on you. In jeopardy are your savings, property, and your financial security. Umbrella insurance can fill the gap.

Umbrella insurance extends the liability limits of homeowners, auto, or other policies to provide additional coverage for situations such as physical injuries, property damage, lawsuits, and personal liability. While umbrella insurance provides vital coverage for people with abundant assets and income, the two situations above show that devastating financial situations can develop for anybody. Here are some reasons to have umbrella coverage:

• You own a dog or some other pet. A dog bite, or some other injury caused by your animal, could result in a lawsuit, with judgments that exceed your liability coverage.
• Your property has a swimming pool. Children think they’re invincible. They’re not. Your homeowners’ policy limits may not be adequate.
• The youngster or teen in your home makes a libelous comment on social media, resulting in a lawsuit. Umbrella insurance can pay for legal costs.

Here’s how it works: Let’s say the bills stemming from that chain-reaction crash come to $600,000. But your auto insurance liability coverage is limited to $300,000, making you personally responsible for the remaining $300,000. An umbrella insurance policy with adequate coverage can make up the $300,000 difference and cover the legal fees incurred by the lawsuit.

So, how much umbrella insurance should you purchase, and how much will it cost? Take note that, according to Trusted Choice (a network of independent insurance agents), 13 percent of personal injury liability awards and settlements are for $1 million or more.

And umbrella insurance can be affordable! A report by ACE Private Risk Services points out that umbrella coverage for a household with one home, two cars, and two drivers should average only about $383 annually.

Your best move when considering whether you need umbrella insurance is to contact Glenn Insurance at 609-641-3000. As an independent insurance agent, Glenn Insurance requests quotes from multiple carriers to find the right coverage for you.