Understanding your insurance in the event of an accident is … complicated. What is covered? What type of insurance policy is best if I get injured or injure another? What is an umbrella policy and should I have one?
My colleagues and I at Murphy & Prachthauser, believe in providing educational information to help you understand how to protect you and your family and understand your options should you ever be injured in an accident. Here is a real scenario that I encountered that may help you understand the complex world of insurance coverage.
Insurance Should Protect You And Your Family
In a recent call that I took, the caller’s insurance agent indicated that if she caused an accident that resulted in the death of one or more people, she could be personally responsible for the damages. As such, the insurance agent recommended an umbrella policy specifically, to cover any damages from an accident that exceeded policy limits.
In this particular situation, while all of the information the agent stated was accurate, I think the agent missed a very important point-- the importance of protecting yourself and your family. If you are injured in an accident by someone with low policy limits, someone who is judgment proof or someone who goes bankrupt -- your umbrella coverage may apply to help you.
Who Should Consider An Umbrella Policy?
Even the farcical motivational speaker, Matt Foley, who lives in a van down by the river, should consider purchasing an umbrella insurance policy. He may not have any collectible assets besides his van, but if he was seriously injured in a car accident, he could lose his career and be unable to support himself. That is where an umbrella policy comes in, specifically to cover the damages caused by someone with no insurance or low limits.
What Is An Umbrella Policy?
A basic umbrella policy typically covers liability only. So if you cause an accident and someone sues you, the umbrella has high enough limits to cover the damages you have caused.
Most companies selling umbrella policies offer what is known as an endorsement to the umbrella. This policy would include coverage for accidents involving uninsured or underinsured motorists. This endorsement protects you if you are injured by an individual driving a car without insurance, or someone who has insurance but the limits are too low.
The person who recently asked me this question was not familiar with any of this uninsured or underinsured motorist coverage. Her agent only offered her policies from one insurer and left out any discussion of the uninsured or underinsured coverage.
In my opinion, that just underscores the importance of dealing with someone who knows insurance and offers products from multiple insurers, rather than a captive agent who sells only policies for one company. Some people purchase insurance on the internet based on price only, without knowing the exclusions and limitations of the policies they are buying. Insurance policies are written in such a convoluted fashion that, unless you deal with these products and see how the courts interpret them, even highly educated, intelligent people cannot read them and fully understand what they mean.
Consider An Independent Insurance Agent
With any insurance purchase, there are options available that need to be explained, and I think that is best done by dealing with an independent insurance agency. There are probably hundreds of them in the metro area, so be sure to do your homework.
One that I personally have dealt with and can recommend is HNI Risk Services in New Berlin, Wis. The insurance agents are knowledgeable and have experience when it comes to finding the best insurance options for each individual. Having products available from multiple insurers allows you to shop for exactly what fits your individual and family needs. The bottom line: an umbrella policy is a very good idea, if you can afford it, and don’t forget to get the umbrella endorsement that protects you from the damages inflicted on you by others.
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Matt Foley was a fictional character played by Wisconsin native Chris Farley on Saturday Night Live. Though his occupation was motivational speaker, he was the antithesis of a motivational speaker.