Do you own a pet? An estimated $1 billion is paid out each year because of dog bites, which make up one-third of all homeowners’ claims, according to the Insurance Information Institute.
Has a visitor tripped on your stairs and sprained a wrist? In New York State, the average tort award for an arm injury of any kind was more than half a million dollars, Business Week has reported.
Therefore, people with assets to lose (or the prospect of sizable future earnings) should protect those assets with excess liability insurance, commonly known as umbrella coverage. This umbrella policy kicks in after your other liability insurance (homeowner’s or auto) reaches its limits. Umbrella coverage is surprisingly affordable, mainly because the insurer will be at-risk only after your other coverage is used up. In most areas, you can buy $1 million worth of excess liability insurance for $150-$300 per year. If you want to buy $2 million worth of coverage, $3 million, or more, the extra coverage is even less expensive, on a cost-per-million basis. It pays to shop for umbrellas. Some insurers will issue umbrella policies only if you buy homeowner’s and auto insurance from them, too.