The Coverage Most Texas Families Skip Without Realizing It
If you ask most Texas homeowners whether they have enough liability coverage, they will say yes. They have home insurance with liability coverage and auto insurance with liability coverage. What they often do not realize is that both of those policies have limits, and those limits are often far lower than what a serious liability claim in Texas can generate.
A personal umbrella insurance policy is the layer of coverage that activates when those limits run out. And at $150 to $300 per year for $1 million in additional coverage, it is one of the most cost-effective protections available to Texas families with assets to protect.
A Real Example of How It Works
Imagine you cause a serious car accident. Three people are injured and require hospitalization and surgery. The total medical bills, lost wages, and legal damages reach $800,000. Your auto insurance policy has $300,000 in bodily injury liability coverage. That leaves $500,000 that is collected from you personally, from your savings, your home equity, your investment accounts, and potentially your future wages through a wage garnishment judgment.
With an umbrella policy, your auto policy pays its $300,000 limit and then your umbrella policy pays the remaining $500,000. Your personal assets are protected. This is what umbrella insurance is designed to do.
Who Should Have an Umbrella Policy in Texas
You should seriously consider an umbrella policy if any of the following apply to you.
You own a home with meaningful equity. You have teen drivers in your household. You have a swimming pool, trampoline, or dog. You own rental property. You have retirement savings, investment accounts, or other assets beyond your home. You have a net worth that exceeds the liability limits on your home and auto policies. You frequently host guests at your home.
Most Texas families who own a home, have children, and have built up any meaningful savings fall into the category of people who should have an umbrella policy.
What an Umbrella Policy Covers That Your Other Policies Do Not
Beyond providing excess liability coverage above your home and auto limits, umbrella policies often cover types of claims that standard policies exclude entirely. This includes defamation and libel claims, slander, invasion of privacy claims, and certain personal injury claims. In the era of social media, these types of claims are more common than most people expect.
The Cost Versus the Risk
A $1 million umbrella policy in Texas typically costs $150 to $300 per year. A $2 million policy might cost $250 to $450 per year. You are adding one million to two million dollars in liability protection for the cost of a dinner out each month. For any Texas family with meaningful assets to protect, the math is straightforward.
How to Find Out If You Need One
Call us for a free conversation about your liability exposure. We will look at your existing home and auto liability limits, your assets, and your specific risk factors and give you an honest recommendation about whether an umbrella policy makes sense for your situation.