Umbrella Insurance is critical to your insurance plan
If you were found negligent or liable for someone else’s bodily injury, death, or damage to their property, would you have enough insurance to protect your assets?
Umbrella insurance can be added to your personal package policy. It provides an additional limit of liability over and above your underlying liability limits that are already on your homeowners, auto, boat, personal, and rental 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.
Umbrella Insurance example scenario
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.
For example – 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 are only $300,000.
In this case, your insurance would pay only $300,000 for the entire accident, and you would be responsible for the remaining $550,000 out of your own pocket!
With an Umbrella policy, however, you could extend your liability limits beyond the maximum provided by your underlying policies. In this case, an Umbrella policy would provide liability limits above the $300,000 limit of your Auto policy, up to the limit you choose to protect you and your family.
- your dog bites a neighbors child
- fire at your condo spreads to other units
- accident at your rental property
How much does Umbrella insurance cost?
One of the things that makes Umbrella insurance so appealing is that the cost is relatively low. Most insurance carriers offer coverage starting as low as $10 a month. Pricing is based on the number of homes, autos, boats, and rental dwellings that you would like covered. For a small additional premium, an umbrella policy provides additional liability coverage in order to protect those assets you have worked hard for.
It only takes one accident to potentially bankrupt yourself
If you don’t have enough coverage, one catastrophic event or lawsuit can bankrupt you. In a world where medical expenses are sky rocketing, it only make sense to think about purchasing Umbrella insurance.
Keep in mind that most insurance carriers require that you have at least your auto insurance policy with them in order to qualify for their umbrella.
Stand alone umbrella policies are available also for special situations.