True story.

Two families lived next to each other for years. The teenagers were best friends since preschool and grew up side-by-side. The mothers were in the PTA and played Bunco every Tuesday night. The fathers golfed in the summer, coached travel hockey in the winter. Holidays, BBQ's and Sunday afternoon Giants games were shared, as the children grew and the years rolled on.
One day, when the kids were in high school, they decided to go to an outdoor concert. One of the teenagers grabbed the keys and got behind the wheel of his dad's car. On the way,  a horrific auto accident occurred. Everyone involved was airlifted to Westchester Medical Center for severe trauma.  Luckily, for both families, their children survived the crash, but it took many months of hospitalization, surgery, and rehabilitation for the teens to return to normal.  
What began as a unified group of friends and family pulling together to make the kids heal, started slowly unraveling as the hospital bills started arriving and the costs began to escalate. Blame was placed. Angry arguments ensued.

Sadly, I see  and hear about a lot of these types of stories  in my day to-day in Warwick:

  • A child hanging off of a neighbors swing set falls and knocks out his teeth.
  • A couple of hot sweaty kids jump over a fence to take a dip in the pool and break a leg.
  • I have even heard of a preschooler who was playing with a rambunctious dog and accidentally got swiped in the mouth and needed stitches and surgery to fix the scarring. 

Thirty years ago when I begin my career in the insurance industry, if an accident occurred, families handled the repercussions on their own. But with skyrocketing medical bills and shrinking medical insurance coverage, people have been forced to look for compensation. You hear scenarios of families practically going bankrupt because of out-of- pocket expenses. So they turn to lawyers, they litigate, they sue.

What happens next, is the defendants rely on their homeowners or auto insurance policies to cover the cost if they are found to be liable. But those insurance policies often have a predetermined cap of anywhere from $300,000 to $500,000. Settlements and awards often exceed 1 million dollars. Suddenly the situation the family finds itself in is dire. College savings disappear. Nest eggs vanish. Wages are garnished.

So, as an Insurance Agency Owner, a parent and a homeowner, I am going to give you the best insurance advice available. One of the most important insurance policies you can ever invest in is an "Umbrella Policy." 

Anyone  who has any type of assets should have at least a $1-million Umbrella Policy to provide liability coverage beyond the limits of their auto- and homeowners-insurance policies. If  you are sued, you could be forced to pay a legal judgment from your current assets and future earnings. An Umbrella Policy can also be used to pay for defense costs from lawyers,  which can quickly add up even if you win your case.  Umbrella Policies are an inexpensive way  (policies can be found for a few hundred dollars a year) to protect your finances from devastating lawsuits. Anyone who is concerned about losing income or assets in one large lawsuit needs an Umbrella Policy. It is the absolute best buy in the insurance business.

For more information on Umbrella Insurance Policies, click: HERE

Information from the Insurance Information Institute, click: HERE