Umbrella Insurance in Texas

When it comes to understanding insurance, most people are knowledgeable on the basics like auto, health, home, and life. Still, umbrella insurance is one that almost no one knows about or understands. "Why do I need additional insurance when I already have a policy that covers every facet of my life?" is one of the most common questions an insurance agent receives. The reality is that an umbrella policy provides additional coverage above and beyond what your existing policy has.

Let's look at an example. You have an auto insurance policy with $100,000 in liability coverage. This means that if you are involved in an accident and deemed to be at fault, then your insurance company will shell out a maximum of $100,000 to cover damages like medical bills, property repairs, and lost wages to the third party. While this may seem like a lot of money - and it is - $100,000 may only be a drop in the bucket for the monetary damages incurred by the third party.

If, after that, $100,000 is exhausted, the injured party still has damages to pay, then they can sue you for additional money. In a situation like that, if you don't have the money to pay the damages, then you could be in financial ruin. That's where an umbrella insurance policy comes into play. An umbrella policy covers costs after your regular insurance limits have been met.

There's no one size fits all approach to knowing how much umbrella insurance you need. As a first step, figure out your total net worth because that's what is susceptible if you are sued. Consider the value of your home, vacation home, investment accounts, retirement accounts, college savings plans, and anything else with a monetary value associated with it. When added together and the total figure is subtracted from the existing policy limits that give you a rough idea of how much umbrella insurance you need. If you are in the Texas area, give SWH Insurance Agency LLC a call to schedule a consultation at our Fort Worth, TX office.