The Mighty Texas Personal Umbrella Policy

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A better understanding of the personal umbrella policy here in Texas.

Thursday, October 05, 2006

Texas Umbrella Policy, The Scenario...

To see how that personal umbrella policy works, there always has to be a scenario or dramatization.

Let’s imagine a family with a husband, wife, and teenage son. Jan and Bill are the parents, and their teenage son’s name is Bobby. Bobby just got his license about a month ago. His parents trust him enough to go to a party but has to be back promptly at midnight. Bobby is having a good time at the party but realizes that its 11:45 p.m. From the party to his home is about 25 minutes away. He leaves with a rush without bidding farewell to his fellow partygoers…

Now, let’s imagine a second family with also a husband, wife and two small children. Molly and Peter are the parents, and their two small children are Sam and Patty. Peter had to work the late shift again for the third time that week. With midnight approaching fast he can’t wait to get home and sleep. Knowing he is just really tired he drives cautiously home…

Peter is approaching a red traffic light and wishes it turned green once he gets even closer. His pillow is starting to yell his name even louder. Bobby is approaching the same intersection. His light turns yellow and then red but does not see another vehicle approaching the intersection. He can’t afford having his parents upset with him for being late so he speeds up to take the red light. Peter unfortunately also crosses the intersection at the same time. Bobby hits Peter on the driver side killing Peter almost instantly.

Jan and Bill, Bobby’s parents, only have 20/40/15 Texas minimum liability limits. $20,000 for bodily injury to another person, no more than $40,000 per accident, and $15,000 for property damages. Just a quick lesson, bodily injury is injury of any kind or death of the other person you hit. Now, don’t you agree that Peter’s life was worth more than $20,000? Peter’s earning potential is an easy $1,000,000. Molly then files suit on Jan and Bill for $1,000,000 since she thinks $20,000 is not sufficient for her husband’s life

In the situation above it is clear that Jan and Bill were not prepared for such a large liability loss. Now they have to worry about their assets in the suit that was brought up against them. If only they would have considered a personal umbrella policy which is really inexpensive to be prepared. That would have made a world of difference.

***Other situations to consider: A guest in your home falls and hurts himself or herself or a guest drowns in your pool.

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