Most people haven’t heard about Umbrella Insurance before. Think about it. What would you do if you were found negligent or liable for someone else’s bodily injury or death? Would you have enough insurance to protect your assets?
That’s what Umbrella Insurance does.
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.
How/When Umbrella Insurance Can Help
One example is let’s say that you’re held liable for causing a car accident involving multiple vehicles. You’re told that 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 only pay that $300,000 for the entire accident. You would be left responsible to pay the remaining $550,000 out of your own pocket!
If you had an Umbrella policy, then you could extend your liability limits beyond the maximum provided by your underlying policies. In this case, your Umbrella policy would provide liability limits above the $300,000 limit of your Auto policy, up to the limit you choose for your Umbrella policy. This is typically anywhere from $1 million up to $5 million in coverage.
In other words, you wouldn’t be left paying the remaining $550,000.
Other instances where Umbrella Insurance could help are:
- your dog bites a neighbors child
- fire at your condo spreads to other units
- accident at your rental property
So How Much is it?
The cost of this insurance is generally very low.
Most insurance carriers offer coverage starting at around $150 per year. The cost of your policy increases based on the amount of cars and homes you need it to overlay, but in general the cost is pennies on the dollar. With all the risk being on the insurance company.
In other words, if your premium was $300 per year, the insurance company is on the hook for at least $1,000,000.
If you think that Umbrella Insurance is the right investment for you, contact us today!