The Case for Umbrella Insurance
Umbrella insurance is a safety blanket for when your existing insurance is depleted. It provides additional liability coverage for when your homeowner or auto insurance has reached its limits. This can come in handy for people in high-risk jobs – such as a doctor or a lawyer.
Who Needs Coverage?
If you own a motor vehicle and a home, then you can consider umbrella coverage. The premiums are inexpensive, and you might find the coverage beneficial.
How Coverage Works
With umbrella insurance, coverage is triggered when your basic homeowners or auto liability policy has been exhausted. The usual umbrella policy is for $1 million, but additional coverage can be purchased. You must have the maximum liability insurance on your homeowners and auto policies before you’re eligible for umbrella insurance.
Types of Coverage
Umbrella coverage is broad. Most policies cover lawsuits that include allegations of false arrest, libel, slander and other causes. It will probably also cover attorney fees.
If you have a lot of property or money to lose, then you’ll want to protect them. If you caused an auto accident, and a verdict came in against you at $500,000 with only $300,000 of coverage, you’re personally responsible for that extra money. You could lose everything. A $1 million umbrella policy won’t cost more than $250 per year. The extra coverage is worth it if you have a lot to lose.