Sometimes your home and auto insurance policies are not enough coverage. The addition of an umbrella policy can significantly inscrese limits of protection and protect your assets.
What if you were found negligent or liable for someone else’s bodily injury or death, would you have enough insurance to protect your assets? Did you know that an umbrella insurance policy is a separate policy that needs to be purchased? This type of insurance policy provides additional (higher) limit of liability over and above your liability limits that are existing on your homeowners and auto insurance policies.
To get a better sense of what Umbrella Insurance is and how valuable to you, the made up situation below will help to realize it.
Say you were the cause of a car accident with multiple vehicles and held liable to cover the damages and injuries totaling $750,000. However, the liability limits on your auto policy are only $300,000. In this situation, your insurance would pay only $300,000 for the entire accident. You are now responsible for paying the remaining balance of $450,000 out of your own pocket!
With an Umbrella policy, you could apply it to increase your liability limits beyond the $300,000 provided by your auto policies. In this situation, 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 (typically anywhere from $1 million up to $5 million in coverage).
The bottom line is you don't have to pay the remaining balance of $450,000.
Fire at your condo or townhome spreads to other units and burns down Accident at your rental property
One of the things that makes Umbrella insurance so appealing is that the cost is generally very low.
Most insurance carriers offer coverage starting at around $200 per year. The cost of your umbrella policy goes up based on how high the limit of coverage will be coupled with the amount of cars and homes you need it to overlay. Overall, the umbrella policy cost is pennies on the dollar for the coverage in the event it's needed.
Even if your premium was $300/yr, the insurance company is covering you for at least $1,000,000. That is a tremendous value. This is something that everyone should think about given the nature of our society with lawsuits.
If you don’t have enough coverage, and in a world where medical expenses are sky rocketing, it only makes sense to think about purchasing Umbrella insurance. It could be a very valuable insurance policy to protect you and your family future.
