Unexpected incidents like multi-vehicle accidents, dog bites, or injuries on your property are increasingly threatening the financial security of individuals, with bodily injury claims rising sharply each year since the pandemic began. The cost for a typical liability claim has surged by 35%, reports Mercury Insurance.

This trend of escalating liability claims exceeding standard policy limits has prompted Mercury to introduce a new personal umbrella insurance policy. This policy offers enhanced protection starting at less than $1.00 per day and is a valuable addition to insurance portfolios, extending coverage beyond standard auto and home policies and safeguarding against potential lawsuits.

This policy has been launched in Texas following its introduction in California, marking a significant expansion in Mercury’s insurance offerings. More details are available on the Mercury Umbrella Insurance website.

“Accidents are becoming pricier, increasing the risk of significant out-of-pocket expenses,” says Brandt Minnich, vice president and chief sales development officer at Mercury Insurance. “Our updated umbrella insurance provides an affordable layer of extra protection, shielding policyholders from costly mishaps and potential legal actions.”

The importance of such coverage was underscored by an incident involving a Mercury policyholder, a doctor who had not updated his insurance since college. After a serious accident involving a moped, he faced large financial liabilities beyond his auto policy’s $25,000 limit, resulting in long-term salary deductions to cover the settlement.

Mercury has enhanced its umbrella policy with features including multi-policy discounts, a 5% discount for accident-free drivers over three years, uninsured motorist coverage up to $1 million, and the option to increase liability coverage up to $5 million.

“We view our umbrella policy as ideally tailored for those needing specific levels of additional protection, vital for protecting against unforeseen expenses and legal challenges,” Minnich explains.

When a personal injury lawsuit occurs and the defendant does not have insurance, the situation can become significantly challenging for both parties involved. Here are the key consequences and processes involved:

1. Financial Liability: The defendant, without the protection of insurance, is personally responsible for paying any damages awarded to the plaintiff. This can include medical expenses, lost wages, pain and suffering, and other related costs. If the damages are substantial, this can lead to severe financial strain or even bankruptcy for the defendant.

2. Legal Representation and Costs: Without insurance, the defendant must either hire a lawyer at their own expense or represent themselves in court. Legal fees can quickly accumulate, adding further financial burden.

3. Asset Risk: If the court rules in favor of the plaintiff and the defendant cannot afford to pay the awarded damages immediately, assets such as property, bank accounts, and wages can be targeted for recovery of the amount owed. In extreme cases, assets may be seized or wages garnished to satisfy the judgment.

4. Settlement Challenges: Typically, insurance companies handle negotiations and settlements in personal injury cases. Without an insurer, the defendant must negotiate directly with the plaintiff or their attorney, which can be daunting without legal expertise. This might lead to less favorable settlement terms or the inability to negotiate at all, pushing the matter to court.

5. No Defense Support: Insurance companies provide legal defense as part of their coverage. Without this support, the defendant lacks not only legal representation unless they hire it but also the strategic advice and experience that insurance lawyers typically provide.

6. Court Judgments and Payments: If the lawsuit goes to trial and results in a judgment against the defendant, complying with the court’s judgment can be logistically and financially challenging. The defendant must manage all aspects of the payment process themselves, including establishing payment plans if they cannot pay in full immediately.

Navigating a personal injury lawsuit without insurance is highly risky and can lead to long-term financial and personal consequences. It underscores the importance of having adequate insurance coverage to protect against such risks. A Katy, TX Personal Injury Lawyer is a great asset to have to help work out the issues within personal injury cases.