Umbrella Policy Coverage

What is an Umbrella Policy?

If you “have stuff,” you probably also have liability insurance. Buying your home? Then you already have Homeowners Insurance. Renting? Hopefully, you have Renters coverage. Driving a car? The law requires you to keep your auto liability insurance current. So, you’re covered, right?

But what if someone files a claim against you after an accident, and their injuries or damages are more than your home, business or auto liability limits? Your personal assets – your home, your vehicles, your savings, investments and retirement – could all be at risk. That’s why many people choose an Umbrella Policy, to provide an “extra layer” of protection.

An umbrella policy takes over when claims or lawsuits exceed the limits on the underlying liability coverage in a homeowners, renters, condo or auto policy.

Umbrella policies typically offer additional liability protection of $1 million to $5 million. Purchasing a $1 million personal umbrella liability policy will cost $150 to $300 per year, and the amount you pay will decrease for each million dollars of coverage beyond that.

Not sure if you need an Umbrella Policy? Add up your assets – the equity in your home, your savings, the value of your retirement accounts, properties and personal possessions. Now add up the limits of any liability policies (home, auto, business) you have. If your assets exceed your liability limits, you are exposing those assets if a large claim or suit is filed against you – and it is time to talk to your insurance agent or company about Umbrella coverage.

Video: Do I Need Umbrella Insurance?