Prepare for life’s storms with an umbrella insurance - East Valley Tribune: Mesa

Prepare for life’s storms with an umbrella insurance

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Posted: Sunday, May 4, 2014 11:00 am | Updated: 6:01 pm, Fri Jun 20, 2014.

Imagine a group of children playing on the swing set in your backyard. One of the kids falls off and is seriously hurt. Her parents sue you, claiming the swing set is defective, and they are seeking $1 million in damages.

An accident like this can happen in the blink of an eye, and it can happen to anyone. Today, more people are pursuing liability claims and courts are awarding expensive verdicts at an alarming rate. Remember that woman who sued a fast-food chain after she spilled coffee on herself? She was awarded $3 million. The fact is, just one lawsuit could cause you a lifetime of economic hardship.

But an umbrella policy could protect you from financial disaster.

What is an umbrella policy?

Personal umbrella insurance applies if the liability limits on your regular home or auto insurance are exhausted. In some situations the umbrella policy might offer protection when your auto or home policy does not.

The cost for a $1 million umbrella policy averages between $150 and $300 annually, according to the Insurance Information Institute. Each additional $1 million of coverage costs about an additional $100 annually.

That means for less than the cost of a dinner out — $13 to $30 per month — you can purchase extra coverage to help protect against a financial catastrophe.

Who needs

an umbrella policy?

While everyone could benefit from extra liability protection, an umbrella policy is especially important for: Anyone wishing to protect his or her property. A person may have to sell his or her home or other property to pay for a lawsuit.

People entering retirement. If you’ve worked hard to save money for retirement and you get involved in a lawsuit, that money or other assets could be taken.

Some accidents might be outside of your control, but don’t let an unfortunate incident put you at serious financial risk. Prepare for life’s storms with an umbrella.

• COUNTRY Financial Representative Marcia Kennedy, whose office is located at 1640 S. Stapley Drive in Mesa, may be reached at (480) 325-1521, ext. 232.

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