Umbrella Insurance
What is umbrella insurance?
Umbrella insurance provides an extra layer of liability protection beyond the limits of your home and auto insurance policies.
Accidents can happen at any time, and when they do, the costs may exceed your current liability limits. That's where umbrella insurance comes into play.
What does it cover?
Umbrella insurance extends protection for personal and auto liability losses, including:
Lawsuits resulting from property damage or bodily injury.
Legal defense costs once your underlying policy limits have been exhausted.
Do I need umbrella insurance?
It is advisable to consider umbrella insurance if you:
Own property.
Have substantial savings or a high income.
Have children, teens, or college students.
Own one or more vehicles.
Engage actively on social media, or participate on any boards.
Rent out property to tenants.
Regularly invite guests into your home.
Without an umbrella policy, you risk losing your home and savings in the event of a catastrophic claim. In today's litigious society, anyone can face a lawsuit, so having that extra protection is crucial.
What’s an example of when umbrella would kick in?
Consider this scenario:
You accidentally run a stop sign and cause an accident. The other party is a dentist who sustains injuries requiring hand surgery, leaving him unable to work. He sues you for his medical bills and lost income.
Your auto insurance policy covers up to $500,000 per accident, but the dentist's lawsuit amounts to $650,000. In this case, your umbrella policy will cover the remaining $150,000.
How can I get umbrella insurance?
To purchase an umbrella policy, you typically need to meet certain eligibility requirements:
You must have primary renters, homeowners, or condo insurance with a minimum personal liability of $300,000 (some insurers will require $500,000).
Your auto insurance policy should have a minimum limit of 250/500/100 (some carriers may require higher limits of 500/500/100).
Your claims history and driving record must align with the insurer's requirements.