What is Umbrella Insurance and Why Do You Need It
Did you know that in Ontario, if you give a work colleague an aspirin for her headache, you are liable if she develops a negative reaction? There are countless other situations where your personal liability (and potential cash payout) is on the line. Scary thought, right, but what can you do about it?
Look into getting personal umbrella insurance coverage, that’s what. Umbrella insurance is an extension to your home and auto insurance, designed to drop down to fill coverage gaps. Umbrella insurance (the term comes from how it shields your assets more broadly than primary coverage) covers you for everything from slander, other people’s loss of income, and all the other disasters that can befall you in everyday life, where someone comes after you for money because they think you’re to blame.
It Won’t Happen to Me... Will it?
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Your teenager throws a party when you’re away, involving underage drinking, and a kid gets drunk and falls off the roof.... how are you going to pay for his upset parents’ lawsuit?
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You rush to assist someone at a roadside accident, and later learn they weren’t too pleased you didn’t have formal first aid training. Your Good Samaritan turn ends up not so good... on your bank account
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Your dog bites the postman and you get a letter from his lawyer seeking damages
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While building your new deck, a load of lumber falls and breaks part of your neighbour’s fence
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You blog about someone, whom you name, in a negative context, and that person sues you for slander
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You forgot to put sand on the sidewalk in front of your house and your elderly neighbour falls and breaks her hip there
An example of how umbrella insurance coverage works: If you have $1 million liability coverage on your home, and $1 million on your auto policy, you can buy an umbrella policy that provides another $1 million - across both home and auto - for a relatively small additional premium.
Of course, no one is going to make you buy personal umbrella insurance - not the way that the province requires you to have auto insurance to drive a car, or the bank makes you purchase home insurance to get a mortgage. But think about it: As our society gets increasingly litigious, can you afford not to have an umbrella insurance policy?
Do you have umbrella insurance; have you had to use it? Leave your comments here.