Oklahoma Personal Liability Insurance

Personal Liability Insurance

aka Personal Umbrella Policy

Personal liability insurance is often referred to as umbrella insurance because it provides excess insurance above what is covered in the primary policies like auto or homeowners insurance. 

In some cases an umbrella policy may cover the exact same things as the underlying primary policy but allow for increased liability limits.  For instance, if your auto insurance policy provided $250,000 of liability coverage, a $1,000,000 umbrella policy would increase your total coverage to $1.25 million.  
Sounds like a lot, but what happens if you drive a $25,000 vehicle and are at fault for an accident that totals a $750,000 recreational vehicle? Your auto insurance policy would only cover part of the damage to the RV. Without umbrella coverage, you could be held personally responsible for the difference. On the other hand, umbrella coverage could potentially cover the remaining amount of liability not covered by the auto insurance. In addition, many umbrella policies will cover attorney's fees to defend you 

In other cases, the umbrella policy may exclude fewer items than the primary policy. For instance, many umbrella policies offer coverage to protect you against lawsuits for slander and libel.  

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When to consider umbrella coverage

One key question to ask yourself is what do you have to lose? To answer the question you may have to calculate your net worth. 

Put a value on everything you own and subtract the amounts you owe on those things. What's left over is your net worth. 

If your net worth exceeds the limits of liability on your primary insurance policies (homeowners and auto) the amount you own above those limits could be at risk.  
Consider this scenario:
  • Your net worth is $200,000
  • Your automobile liability insurance coverage is $300,000
  • Your driving age child is at fault in an accident that results in $500,000 damages
  • The damages exceed your auto insurance limits and the court says you owe the other party $200,000
  • Would you have to liquidate your assets to pay the $200,000 of damages not covered by your auto insurance?  
This is a scenario in which an umbrella policy could help you protect your net worth. 
When you consider that we live in a litigious society, medical costs are soaring and the price of a single vehicle can easily exceed $75,000, a scenario like the one above seems less hypothetical and more real.  The professional team at TrustPoint Insurance can help you evaluate your risks and your options for protecting your hard earned savings.  Give us a call today at 405.225.2820 to start the conversation. 
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