Liability insurance is something most people are familiar with. If you own a car you must carry an Oklahoma liability insurance policy because it’s required by law. If you hurt someone or smash someone’s car or property, your car liability coverage would help you pay for those costs. Many people have liability risks that go beyond a car accident scenario. Hence the need for a liability umbrella policy.
Who needs a liability umbrella policy in Oklahoma?
You may think that you would never be sued, because you do not consider yourself rich. You can’t get blood from a turnip, right? If someone that has very little income or assets causes injury or damage, it’s unlikely that a lawsuit would be able to wring anything additional from them. On the other hand, if a person that causes injury or damage does have assets, they should expect themselves to be fair-game. This may not seem fair. But that’s not the point. This is the reality we live in. If you’re young, single, broke, renting and healthy, losing everything you own would be terrible, but you’d likely recover eventually. If you own a car, home, and have a job, you should consider your need for a liability umbrella.
Some factors to consider when determining your need for a liability umbrella policy:
Calculate the total value of your assets – things like your home, car, savings, and investments.
If someone sues you and gets a judgment that exceeds your liability insurance coverage, your future earnings may also be on the line, and could be garnished to pay the judgement against you. To address this, consider multiplying your income by five and adding that amount to your asset total.
If you have teenage drivers in your house, you have a real risk. Statistics tell us they will be in at least one wreck between the ages of 16 and 19. Plus, it is highly likely that it will be their fault. Other real risks are owning a dog, having a swimming pool, trampoline, or basketball goal on your property. These real risks don’t make you rich, they give you more opportunities and greater exposure to a liability loss. Social Media participation is not something most people would associate with a liability exposure. Making derogatory statements about companies or individuals can lead to legal action.
If you have a profession in which the perception is that you have assets and a good income, you should consider purchasing a liability umbrella policy. Not all doctors, lawyers, and bankers are wealthy. But that is the perception. What you have, you want to protect.
Okay, you need a liability umbrella policy, but how much coverage do you need?
Remember the total assets and future income factors from above? If your total household earnings are $100,000 a year, and you have $500,000 in assets to protect, you may want a $1 million policy. You’d almost certainly want umbrella coverage.
What’s this going to cost?
According to the Insurance Information Institute, a $1million liability umbrella policy costs between $150 and $300 per year. However, it depends on the exposures to be covered. The cost can be reduced by bundling the policy with your home and car insurance carrier. The biggest expense could be from not having a policy when you need it.
The information contained in this page is provided for general informational purposes only. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.