Personal & Financial Strategies

A Personal Umbrella for a Rainy Day


Lisa Mawyer, State Farm agent, discusses a variety of applications for insurance, and why these services can be so valuable when trouble arises.

Picture this scenario: A woman leaves her car securely locked and safely parked on a quiet side street. But the unexpected happens. When she returns, her car is severely damaged.

This scenario has a happy ending. After the initial shock, she calls her insurance agent. The agent guides the woman through the claim process and explains that her car policy’s collision coverage will pay the cost, after the deductible is met, to repair her car.

Why Insurance?

State laws require owners and drivers of motor vehicles to be financially responsible for damages they cause in a car accident. Insurance satisfies this requirement. In addition, optional coverages are available that can further reduce your risk of significant financial loss from a car crash, even if it’s not your fault.

Types of Coverage

There are various types of coverage available when purchasing an Auto insurance policy.

Lisa Mawyer

Liability: Pays damages for bodily injury to others and damage to property that result from a wreck that is caused by an insured under your policy. Also pays for other costs including legal defense and court fees in the event an insured is sued because of a car wreck.

Collision: Pays for damage, after a deductible is met, to your insured car when it strikes, or is struck by, another vehicle or object.

Comprehensive: Pays for damage to your insured car that was not caused by a collision. Some examples include damage caused by fire, wind, hail, flood, vandalism, theft, or impact with an animal. There may or may not be a deductible for this coverage.

Medical Payments Coverage: Pays the reasonable and necessary medical expenses for an insured that is injured in a car crash, regardless of who is at fault for the wreck.

Uninsured Motorist Coverage: Pays damages to an insured that is injured in a car crash when the person(s) responsible for the wreck accident has insufficient liability insurance to fully compensate the insured for the injury.

Car Rental Expense: Pays eligible rental car expenses if your car is not drivable because of a loss which would be payable under Collision Coverage or Comprehensive Coverage.

Emergency Road Service: Pays for items such as towing expenses, the cost to deliver gasoline, and specified labor charges to unlock your car if the key is locked inside the car.

When shopping for insurance, it’s important to look at more than the total cost. Become familiar with the amount and type of coverage that is being offered. Also, note what isn’t being covered, who is covered while driving your vehicle and the quality of customer service in the event of an accident. And always remember to make sure the company you’re insured by is financially strong.

The bottom line is that you should understand your policy and buy the amount of insurance you think you need.

About Personal Liability Umbrella Policies

There are so many “rainy days” that people can experience – a sick child, a broken-down car or a late mortgage payment. But what about a lawsuit?

These days, lawsuits are being filed not only against big corporations, but also against people like you and me. In the blink of an eye, you could be involved in a car or boating accident, or have someone become injured on your property, which could result in litigation against you that seeks thousands or even millions of dollars.

Even though your primary insurance policies, such as auto, homeowners, boat owners, etc., may provide substantial liability insurance coverage, it may not be enough. A Personal Liability Umbrella Policy provides additional amounts of liability coverage at an affordable price.

A Personal Liability Umbrella Policy provides additional layers of liability coverage over the liability coverage of your underlying policies. Personal umbrella coverage amounts typically begin at $1 million and can be increased in increments of $1 million.

Here’s an example of how an umbrella policy could work: Let’s say your car is insured for liability with limits of $250,000; an umbrella policy would respond for the next $550,000.

Also, an umbrella policy often insures against some types of losses for which there is no coverage in the underlying policy. Examples of such loss include libel, slander and defamation of character.

The value of a personal liability umbrella policy is to provide higher amounts of liability coverage for an affordable premium. It can help protect the financial assets of your household when you need it most and can bring confidence knowing that you have the coverage needed to help protect your family.

To see if this is a policy that can benefit you, talk to your insurance agent.

Lisa Mawyer State Farm Insurance is located at 1633 N. Alpine Road, Rockford, Ill., in Edgebrook.

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