How an Umbrella Insurance Policy May Help Victims of a Minnesota Car Crash

business person holding umbrella icon over familyDid you know umbrella insurance could be used to pay for damages you suffered in a car crash?

That may be surprising to you if you have heard at least a little about umbrella policies. You may have heard they can help protect the financial assets of someone who causes a crash. Umbrella policies are recommended for those who have significant financial assets and those with a high public profile. For example, if you cause a catastrophic crash and have an umbrella policy on your car, the injured party will be properly compensated, and your private assets will not be at risk.

However, in addition to protecting your assets if you cause a crash, there are some umbrella policies that provide first-party benefits, such as uninsured and underinsured motorist coverage. This coverage could be used to compensate you for damages caused by another driver without insurance or one who did not have enough insurance to pay for your damages.

Below, we discuss umbrella policies in greater detail and why you may want to consider purchasing a policy if you can afford it.

If you were injured in a crash and have questions about seeking compensation, give us a call as soon as possible. Our Minneapolis auto accident lawyers are ready to assist you in seeking compensation at no upfront cost to you.

What is the Purpose of Umbrella Insurance?

One of the main purposes of these policies is to prevent the policyholder’s liability for a crash from causing financial ruin. If you cause a crash but your liability insurance runs out, you may still be on the hook for any remaining damages. That means the victim and his or her attorney may come after your assets, like your:

  • House
  • Business
  • Stock assets
  • Car
  • Life savings
  • Jewelry
  • Art
  • Other personal property

Should You Consider Umbrella Insurance?

There is nothing wrong with giving it some thought, particularly because umbrella policies are relatively cheap. The costly insurance is the base coverage that is mandatory in Minnesota. $30,000 is the state minimum.  Most companies require a base policy of at least $250,000.00 in coverage. The umbrella on top of that is fairly cheap.  In fact, they often cost around $150 to $300 per year, which is somewhere between $12 and $25 per month.

As explained above, not only could this protect you if you cause a crash, but an umbrella policy can protect you and your family if you are severely injured in a crash. Car crashes can be very dangerous and easily lead to serious or life-changing injuries. Treatment for these injuries could easily cost more than the value of the liability coverage from the vehicle that hit you.

It is important to be thorough when purchasing insurance coverage. If you get into a serious crash, you will be thanking yourself that you took the time to be clear on everything before you bought the policy.

Make Sure the Umbrella Policy has First-Party Coverage

It is important to note some umbrella policies do not include first-party coverage. They only pay for damages for which you are liable. That is why it is important to make sure a policy provides first-party uninsured and underinsured coverage before buying it, unless you only want the policy for third-party coverage.

You may have heard about stacking uninsured or underinsured motorist benefits, which is when you can combine uninsured motorist coverage from multiple drivers on one policy for one accident. However, in Minnesota you cannot do this. You are only allowed to stack wage loss and medical benefits for no-fault coverages.

If you buy umbrella insurance that does not provide first-party coverage, you will only get the base policy limit of your coverage no matter how injured you are. For example, if a bad driver hits you and does not have any insurance, you are limited to the base policy on your car for uninsured coverage.  If you properly purchased an umbrella policy with uninsured coverage, you could get 1 million dollars instead of $30,000.00 for compensation.

Need Help After a Car Crash? Call TSR Injury Law Today

It is often difficult for car crash victims to secure the compensation they need following a car crash. The insurance company may make an offer, but it could be for far less than the full value of a claim. Even if you try to renegotiate, they may refuse to change their offer.

That is why you should strongly consider hiring an experienced attorney to help you seek full compensation. At TSR Injury Law, there are no upfront fees or legal obligations with our services. That translates to no risk in contacting us. We are here to help, which is what we have been doing for over two decades and we have a proven track record of success.

Give us a call today to learn more. Call (612) TSR-TIME.