Why the Need for Umbrella Insurance Increases as You Near Retirement Age

Why do insurance agents offer you umbrella policies consistently after you’ve reached the age of 40? AtArmorcrest Insurance Services, we want you to protect your financial future and understand that an accident in which you incur liability could wipe out your savings without umbrella coverage.

Accident Liability Example

Accident liability doesn’t just refer to auto accidents that you cause in El Centro, CA. It also refers to when an individual or group gets injured at your home or while using your equipment. If you libel someone, you incur liability for the damage you did to their reputation.

For example, if a child drowned at your swimming pool party in your backyard, you would be liable for their medical bills and funeral if they died, as about 5,400 US residents do yearly. You’d pay for their medical bills and recovery therapy if they survived. This medical emergency could cost hundreds of thousands of dollars.

Existing Liability Coverage

Typical homeowners insurance policies include a small liability component equal to between 10 and 20 percent of the home’s value. If your home value at the time of insuring was $250,000, your policy includes between $25,000 and $50,000. Here’s some scary math; one night’s stay in a hospital costs about $8,000. You can see how your home liability coverage would quickly pay out its full amount.

Out-of-Pocket Expenses Can Decimate Your Savings

The remainder you must pay out of pocket. The injured can take you to court to force an immediate payment. If you have yet to reach the age of 40 years, you have enough time to replace the money you use from savings and investment or retirement accounts by working more.

Once you reach the age of 40, you’ve surpassed the point that you can easily replace those funds. Those past 50 years of age would need to replace 30 years of savings and investment in 15 years. It wouldn’t be impossible, but it wouldn’t be fun either.

Contact Armorcrest Insurance Services Today

Once you reach 40, your insurance agent offers you umbrella insurance to help protect you against this happening. Umbrella policies offer additional liability coverage that only costs a few dollars per month. Once the main policy – the home policy in the drowning example – pays out, the umbrella policy automatically kicks in and pays for the rest of the bills up to its policy cap.

Umbrella policies typically provide $1 million of coverage or more, so the chance of going over the cap remains slim. Contact Armorcrest Insurance Services today to protect your liability in El Centro, CA, and abroad.