If you were found negligent or liable for someone else’s bodily injury or death, would you have enough insurance to protect your assets?
Umbrella insurance is a stand-alone liability policy that provides an additional limit of liability over and above your underlying liability limits that are already on your homeowners and auto insurance policies.
Life can be unpredictable and as much as we plan for the best, sometimes the worst can happen. This is where umbrella insurance comes into play and provides you with additional coverage that goes above and beyond to protect your assets.
An umbrella policy allows you to extend your liability limits beyond the maximum provided by your underlying policies.
To get a better sense of what Umbrella Insurance is and how it would work in a real life situation, it helps to think about it in action.
Say you’re held liable for causing a car accident with multiple vehicles, and the cost to cover the damages and injuries is $850,000. However, the liability limits on your auto policy is only $300,000.
In this case, your insurance would pay out the $300,000 covered by your auto insurance for the entire accident. Which, would leave you responsible for paying the remaining $550,000 out of your own pocket!
However, if you had an umbrella policy it would provide liability limits above the $300,000 limit of your auto policy, up to the limit you choose for your Umbrella policy (typically anywhere from $1 million up to $5 million in coverage).
Most importantly, it means you wouldn’t be left paying the remaining $550,000.
There are numerous events in which umbrella insurance will keep you protected such as if your dog bites a neighbors child, there is a fire at your condo that spreads to other units or there is an accident at your rental property.
One of the things that makes Umbrella insurance so appealing, and almost a no-brainer in most situations, is that the cost is generally very low.
Most insurance carriers offer coverage starting at around $150 per year. The cost of your policy goes up based on the amount of cars and homes you need it to overlay, but in general the cost is pennies on the dollar, and all the risk is on the insurance company.
So if your paying a premium of $300 per year, your insurance company is on the hook for at least $1,000,000. That is tremendous value, and something that everyone should think about given the litigious nature of our society.
Keep in mind that most insurance carriers will require you to have at least your auto insurance policy with them in order to qualify for their umbrella policy. However, stand alone umbrella policies are available for special situations.
If you don’t have enough coverage, and in a world where medical expenses are sky rocketing, it only make sense to think about purchasing Umbrella insurance. We highly recommend taking out an umbrella insurance policy as it is an affordable way to to ensure that you aren’t financially crippled should the unexpected happen.
To get started with your quote, call our office and I will shops the marketplace to see who offers the best coverage.