Can Umbrella Insurance Act as Life Insurance?
An umbrella policy is an insurance policy that brings all of your coverages up to a high amount, like $1 million. Generally, auto insurance policies max out at $500,000, so for just a few hundreds dollars per year, you can bring those limits up to $1,000,000. Basic umbrella policies will protect you from lawsuits for any accident that is your fault. However, you can add additional coverage to your umbrella policy to cover losses and damages when it’s the other driver at fault.
When you add that extra coverage, you are entitled to that $1 million of coverage when you are injured in an accident — regardless of who caused the accident. So for example, if you are severely disabled in the car accident, your lawyer can place a claim against your own umbrella policy to acquire those funds to cover your own lost wages and medical problems. The same rule applies when you die in the accident. Your survivors (spouse, children) can use that umbrella policy coverage to gain access to the wages you would have provided over the course of your lifetime.
This is an especially helpful tool when you are unable to get life insurance because of other medical problems. While the umbrella policy doesn’t provide insurance coverage if you die from sickness, you are still covered if you are in a car accident and are severely injured or die.
Using an umbrella policy to recover lost wages is an uncommon claim, but valid. Consult a personal injury attorney to determine if buying an umbrella policy could provide you with some extra coverage you need in the case of an accident.