RAINA BONDS, ESQ

1934 Old Gallows Rd., Suite 350

Vienna, VA
www.reflectionslifeplanning.com
JANUARY 2019 (703)- 752 -6196
OCTOBER 2022
1934 Old Gallows Rd., Suite 350
Vienna, VA Does Your Family Need Umbrella Insurance?
By: Raina Bonds, Personal Family Lawyer®

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In today’s highly litigious society you are
at near-constant risk for costly lawsuits—
even if you’ve done nothing wrong. This is
especially true if you have substantial
wealth, but even those with relatively few
assets can find themselves in court facing
a potentially devastating lawsuit.
If you are sued, your traditional
homeowners or auto insurance will likely
offer you some liability coverage, but
those policies only cover you up to a
certain dollar amount before they max
out, and you can be held personally liable
for anything beyond that limit. For this
reason, you should consider adding an
extra layer of protection by investing in
personal liability umbrella insurance.
An Extra Level of Protection
Umbrella insurance offers a secondary
level of protection against lawsuits above
In This Issue
Main Article:
and beyond what’s covered by your
homeowners, auto, watercraft, and other
personal insurance policies. Umbrella
policies can cover a wide array of
potentially ruinous costs related to a
lawsuit, such as medical bills, legal fees, lost
wages, court costs, and other expenses.
For example, say you cause a car accident in
which multiple people are seriously injured.
Their medical bills total $800,000, which
exceeds the $250,000 in your auto
insurance policy limits. This is where
umbrella insurance kicks in. The umbrella
policy will pay for the remaining $550,000
,as well as your legal expenses if you lose
the case. And whether you win or lose, your
legal fees would be covered.
But medical bills and legal expenses are
only one potential expense you could face.
In the above example, let’s say one of the
injured parties is a highly paid executive
who is unable to work for four months
because of their injuries, so in addition to
his or her medical bills, the person also sues
you for lost wages totaling $80,000. With
your auto insurance limits maxed out, you
are now on the hook for $630,000, and
unless you have umbrella coverage, your
your insurance policy limits, the court can
allow the plaintiff to go after your future
earnings, potentially garnishing your
wages for years. In this regard, umbrella
insurance not only protects your current
assets, but your future assets as well.
Additionally, umbrella insurance is
especially valuable if you fit into any of the
following categories, which generally
increases the likelihood of getting sued.
• You have a swimming pool, hot tub,
trampoline, playground set, or other
potentially hazardous recreational
equipment.
• You have dogs, horses, cattle, or other
large animals.
• You employ household staff.
• You frequently host large parties or
•
other events in your home.
You are a well-known public figure.
How Much Coverage Should You Have?
Most people will be adequately covered
with a $1 million umbrella policy. If you
earn more than $100,000 a year or have
more than $1 million in assets, you may
want to invest in additional coverage. A

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Does Your Family Need Umbrella good rule of thumb is to buy an umbrella
personal assets like your home and/or policy with coverage limits that are at least
Insurance?
retirement savings could be at risk to cover equal to your net worth.
those costs.
What’s Cooking:
Strawberry Popsicles Who Should Have Umbrella Insurance
Q&A Umbrella insurance is valuable for anyone
Can I tap into my retirement who can afford it. Anyone can be sued at
savings to pay for my child’s any time for anything, which means it’s a
college education? particularly good idea if you are engaging in
any activity that could leave you liable for a
Monthly Offer: judgment in excess of your policy limits.
Who Stays with Your Children?
If you are sued and a judgment is ordered
against you for an amount that exceeds

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