Having the Right Coverage Matters
Umbrella insurance can be a financial lifesaver
During a long career in the insurance industry, I’ve been blessed to help many people involved in catastrophic accidents file claims and get the help they need. But unfortunately, there have been occasions when folks rejected my best advice to have proper coverage, and later they had to endure significant losses.
I still recall one particular situation that happened nearly 20 years ago. At the time, I ran my own insurance office, and one of my clients was a hard-working family that owned a music store in downtown Seattle. The family owned an RV, and each winter, they would drop the RV insurance coverage down to a minimum and then add it back in the months they used it.
I tried to convince them to buy an umbrella policy to go along with their underlying home and auto policies. It also would protect them while on the road in their RV. They thought long and hard about it, but they just felt they were not well-off enough to require it.
At that time, a standard umbrella providing $1 million in extra liability coverage on their house and vehicles would have cost around $155 per year. One late-spring day, the wife called me to bump up the liability on the RV, I mentioned umbrella insurance again. Well, she declined.
That same weekend, I got a page from the husband. He told me there had been an accident. Their RV rounded a bend going 55 MPH on U.S. Route 2 near Snohomish and hit a van turning into a driveway. He just couldn’t stop the 34-foot mobile home in time. They were OK, but two kids in the van were airlifted to Harborview Medical Center. He was devastated, of course. They’d been to the emergency room and prayed for the injured kids with their family. Thankfully, they pulled through, but this wasn’t the end of the story.
About six months later, I got another call from the husband. “I got a letter,” he said, his voice cracking. “I think it says I don’t have enough insurance.” The insurance carrier was notifying him that it was paying the claim, but his policy wouldn’t cover the expected claims from the victims, and he should hire a lawyer at his own expense. Long story short, this family spent years in court resolving a lawsuit, and ended up paying a large claim and legal fees out of pocket. If he had purchased the umbrella insurance, he would have been covered for all of it with a small deductible.
You never forget the calls from people who have suffered devastating accidents and ended up facing financial ruin. As much as I tried to convince this family to buy extra protection in the form of umbrella insurance, I couldn’t help them when they really needed it. That is one of my greatest regrets.
Note: An umbrella policy sits on top of all your other insurance policies, providing extra liability coverage in case you unintentionally injury someone in an accident and are found liability for damages. For around $25 a month, you can buy $1 million in coverage and save yourself from a ruinous financial loss. Read more about how umbrella insurance works.
– Michael Riley, director of sales at AAA Washington Insurance Agency, has more than 20 years of experience in the insurance industry and is a guest lecturer at Washington State University.
– AAA Washington Insurance agents are here to help. Whether you’re ready to buy, need an insurance review or simply have questions, we’re your one-stop shop. Call (877) 222-4678 for a professional consultation or find an agent online.