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The Umbrella Policy: Protecting Yourself From lawsuits

Let’s throw out an all too common scenario for you to consider throughout your day. Your son or daughter turns 16 and wants to get a driver’s license.   You being the good parent want to say yes (and are excited about letting them drive themselves to soccer practice) but you’re nervous about them getting into an accident. You’ve done your due diligence and realize that the statistics are not in your child’s favor and you don’t want to see them get hurt or hurt anyone else. Begrudgingly, you say yes and start teaching them to drive, so that you’re absolutely sure they’re going to have the best possible chance.


Fast-forward about 6 months and the child has his or her license and    Umbrella 3  is feeling pretty confident about their new skills. Maybe they start showing off, or perhaps the very important text “hi” distracts them and they just can’t resist answering. God forbid they do something completely irresponsible like having a drink and getting behind the wheel. It could also be that it’s not negligence but mere inexperience that causes the accident.   Either way, your child is injured and seriously injures others in the car as well as the people in the car he or she hit.


Now once you get over the terror of knowing that your child could’ve been killed, you start to realize the implications that this accident will have on you and your family. This is a very serious and probably devastating financial situation. There will certainly be medical bills, lawsuits and legal fees. You also realize that since your child has no immediate assets, yours are in play and you have no real protection other than standard car and family medical insurance. This is when the other kind of fear creeps in. The kind of fear that makes you blame yourself for not being better protected and putting at risk everything your family has.


Umbrella 2I’m sorry to paint such a grim picture, but I really want to get across the point that the financial disaster portion of this story could’ve been easily avoided. There is an insurance policy called an umbrella policy that is very inexpensive that adds a blanket of protection covering any situation you can dream up. The key to being completely covered is knowing how much to get. Umbrella policies are sold in increments of 1 million dollars and a good insurance broker can guide you to the proper amount to buy as well as the best company to buy from.


Please, do yourself a favor and find a really great broker that will sit down with you and explain all of your options. You don’t need to live in fear and you don’t need to have your life ruined by one mistake.

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Leading the industry through his innovative approach, Dino Katsiametis has over 17 years of extensive experience within mortgage, banking and real estate industries. His passion for the collective financial and investment services sector combined with his distinct insight, has catapulted Money Matters with Dino onto the forefront of financial news.

There are 8 comments

  • Wow… making sure you’re covered for any eventuality sounds like it’s all about fear but I think it’s really about taking the path of least resistance so you can sleep at night knowing your financial future is safe. And this story makes me so happy as part of double income no kids household to only have to worry about my actions!

  • Dean Patino says:

    Thanks for the tip on this Dino. An umbrella policy will at least provide a peace of mind when it comes to coverage. Meanwhile, as a father of 3 kids who are all past the age of 16, I can appreciate what you wrote. Thankfully mine only had some minor car incidents along the way. One thing I did was share driving tips throughout their years past 16, that definitely helped them to appreciate once they became drivers how and why to handle various driving scenarios so they were that much better prepared to avoid dangerous ones.

  • Frank Bria says:

    It seems like we always think of these things when it’s too late. Thanks for showing me the end state I would like to avoid. I would love to hear more about how much you should get, what the options are, and what (if any) riders would be good.

  • Hey Dino, there’s nothing grim about the picture you painted. No matter how careful we are, things happen. I’m the head in the cloud kind of person and I’m glad I have a financial advisor that helps me with this kind of things. 🙂

  • Dino, You have provided the perfect scenario to help illustrate why have the proper insurance coverage is so important. We need to hear about these situations BEFORE they happens, so that we can be prepared. Thanks for highlighting this info to parents who are soon going to be in this situation so they can have the forethought to ensure proper coverage.

  • pam says:

    Dino, wonderful information so we can at least be mindful of the UNPREDICTABILITY of life. There is definitely a place for the purchase of insurance in everyone’s life…depending upon risk factors and an individual’s risk aversion profile. Thanks for sharing and illuminating !

  • Jodi Flynn says:

    Dino, great tips. I heard once, would rather pay now when you are in a good state of mind or pay later when you are stressed and upset. Insurance not only provides you coverage it guarantees someone will be there to help you navigate the process when you might not be at your best.

  • Jaime says:

    Gulp — I had never once thought about our insurance… we have homeowners insurance and car insurance because that’s what we’re “supposed” to have. We have medical insurance through my husband’s employer and life insurance the same way.
    Thank you for sharing — certainly learned something today, and will be sending the hubby over to take a read too!

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