Why Having an Umbrella Policy is Vital for Medical Professionals & Investors
Getting insured protects you, your family, and your finances when it comes to major disasters or lawsuits to cover you from future liability. Every person, whether a medical professional, corporate office worker, or self-employed person, should consider their insurance needs based on their financial standing, real estate holdings, family needs, and any future plans they may have.
If you're a medical professional considering using real estate as an investment, consider purchasing umbrella insurance to fit into your investment plan and cover any gaps.
What is Umbrella Insurance?
Umbrella insurance is an additional coverage above and beyond a homeowner's or renter's insurance policy. It provides extra protection against personal liability and damages if you are sued for damages or injuries. Business owners, celebrities, doctors, and lawyers often use umbrella insurance to protect themselves from lawsuits.
It adds additional coverage that provides an extra layer of protection for you, your family, and your assets. It helps you cover costs above what your homeowners or auto insurance policy can pay.
How Does Umbrella Insurance Work?
An umbrella policy differs from a typical homeowners' or auto policy because it covers liabilities not included in those policies. This includes losses from injuries sustained at work and other activities that aren't covered by standard policies. It also protects against lawsuits arising from bodily injury or property damage caused by you and/or people in your home.
An example of a use for umbrella insurance could be the following:
Say you caused a car accident that resulted in major injuries from more than one person. If the medical bills go over your $300,000 liability car insurance policy, your umbrella insurance can cover any excess costs resulting from the accident.
Where an Umbrella Policy Could Help Real Estate Investors
The standard home insurance policy in the United States covers most of your property and liability risks, but it does not protect you against all the different ways you could be sued. The most common types of lawsuits that umbrella insurance can help with include the following:
Property damage lawsuits from guests and contractors (e.g., a guest tripping over your dog and breaking their ankle on their way to the bathroom)
Medical malpractice lawsuits (e.g., if a doctor performs surgery on the wrong part of your body)
Slip-and-fall lawsuits (e.g., if someone falls into an unfenced pool on your property)
Your charity is being sued for a board-related issue.
Your child causes property damage to another person's home or business.
You get in a vehicle accident and cause property damage.
As mentioned above, umbrella insurance policies cover more than just your home. They also cover any personal property you own, such as furniture or jewelry.
This is important because if the worst happens and someone breaks into your home, it would be a nightmare if they took all of your valuables with them. With this policy in place, regardless of whether or not you have homeowner's coverage, there should be enough to replace everything that home invaders took!
In addition to covering losses related to residential properties and personal possessions, umbrella insurance policies can protect rental properties and automobiles. This means that if someone damages one of these things while staying at one of your properties (for example), you are covered under this additional layer of protection without having to worry about paying out-of-pocket costs.
Umbrella insurance also covers the following cases that you won't typically find in other insurance policies:
False arrest or detention
Wrongful eviction
Invasion or privacy
What Umbrella Insurance Can't Do
While umbrella insurance is fantastic, it does have some things that it won't cover, like:
Business losses
Intentional criminal acts that you perform
Contracts, either written or oral
Damage from war or terrorism
How Much Does an Umbrella Policy Cost?
It depends on the company and the amount of coverage you buy. The average cost is a few hundred to a few thousand dollars per year, but your price will vary depending on what type of asset you're insuring, where you live, and whether or not you live in an urban area.
The liability coverage available under an umbrella policy varies widely depending on which company sells it to you. Your agent can help determine how much liability protection will meet your needs appropriately without breaking the bank.
Where You Can Buy Umbrella Insurance
Umbrella insurance is commonly sold by insurers that sell auto, home, and boat insurance. If you buy umbrella insurance from a company that also provides your auto or homeowners insurance, you could get a great deal by adding it to your existing insurance portfolio with that company.
Why is it Important to Have an Umbrella Policy?
As a medical professional investing in real estate, consider the umbrella policy as a potentially integral part of your insurance portfolio. While it won't cover every accident or circumstance, it can provide additional coverage for events that your homeowner's policy doesn't cover at all or covers only partially.
The umbrella policy is like an umbrella over your head: You don't need it on a sunny day, and you probably don't want to carry one around in the rain, either. But when there's a storm, and the wind picks up, you'll be happy to have it. A good umbrella policy will protect you from loss if something unexpected happens and another party files a claim against you.
David Price MD is the Founder and CEO of getFREED, a business providing real estate education and vetting of individual deals to help physicians and other healthcare professionals build a passive stream of income, allowing them to work less and practice on their terms.
David lives with his wife and two daughters in Atlanta, GA, USA.
To find out more about David and getFREED, head to http://www.get-freed.com.
