At Hill Investment Group, we recognize that when a few clients raise the same question, it’s likely that more have similar thoughts. To better serve you, we’re introducing a new segment in our newsletter where we’ll address common questions and how we approach them. To submit questions for future newsletters, email us at info@hillinvestmentgroup.com.
Hey Hill, do I need umbrella liability insurance?
It’s an important question! Many clients feel there’s no shortage of situations or assets that can be insured; however, having adequate risk management is key to protecting your assets and financial health.
So, what is umbrella insurance, and do you really need it?
Most insurance policies, such as home and auto, only pay up to a certain amount for liability coverage. Umbrella insurance can help protect you against claims other policies may not cover entirely. Typically, umbrella policies don’t kick in until all other related policies have been exhausted. For example, if someone gets hurt in your home and you’re sued for medical bills, your umbrella policy would kick in after your home or auto limits are reached.
Further, umbrella policies might have broader liability coverage than your other policies. For example, umbrella policies might cover false arrest, defamation, libel, and slander.
The Texas Department of Insurance provides some examples of claims that could fall under an umbrella policy:
- You cause a severe car accident.
- Your dog bites someone.
- A child is hurt on your property (e.g., in your pool or on your trampoline).
- Someone hurts themselves in your home.
Generally speaking, it is a great idea to have an umbrella insurance policy to cover any additional liability not covered by your existing policies (especially if you have teenagers, as you are responsible for their actions)! For example, auto and home policies typically only cover up to $500,000 in liabilities. If you have a net worth of more than that, you should take advantage of this cost-effective coverage (~$125 annual premium/$1,000,000 of coverage).
To provide additional perspective, we recommend booking a meeting to review your entire risk management portfolio and working with a licensed insurance agent to ensure you are adequately covered at a fair price.
*Hill Investment Group acts to help you secure the appropriate solution but does not sell insurance, nor do we receive compensation from insurance-related firms.
Hill Investment Group is a registered Investment Adviser. Registration of an Investment Advisor does not imply any level of skill or training. This information is educational and does not intend to make an offer for the sale of any specific securities, investments, or strategies. Investments involve risk, and past performance is not indicative of future performance. Return will be reduced by advisory fees and any other expenses incurred in managing a client’s account. Consult with a qualified financial adviser before implementing any investment or financial planning strategy.
