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Umbrella Insurance

A Guide to Umbrella Insurance Coverage

Umbrella insurance is extra-added liability protection that goes above and beyond the usual policy limits of one’s auto or homeowners’ insurance coverage. If your current liability coverage isn’t enough to compensate for another’s damages, (when you’re at fault), this is where umbrella coverage could, in the future, help you to avert financial disasters.

Who Benefits?

Despite what many may believe, a person does not have to be really wealthy to enjoy the benefits of good umbrella insurance coverage. Owning your own home and being the head of household is generally sufficient to enable one to have this extraordinary added protection. If you fall asleep while driving and cause an accident with a driver who just so happens to be noted lawyer or if your clumsy house visitor trips and falls off your deck, breaking a hip, without enough coverage all that you have worked so hard to amass could be threatened. With the usual auto or homeowners insurance, you will be protected with the initial $300,000 (or there about). The issue here is that you are then personally liable for any amounts that exceed that level.

What it Provides

Good umbrella insurance, in addition to what is outlined above, can also cover gaps in one’s existing homeowners’ or auto insurance policies. Examples include:

• Defamation or Slander
• Malicious prosecution
• False arrest or imprisonment
• Infliction of mental anguish

If you are the unlucky target of a lawsuit, you will no doubt incur huge legal expenses. This is true even if you win! It’s common knowledge that lawyers are expensive, but with a typical umbrella policy you can have your insurance company appoint a legal team to fight for you. Coverage includes paying for such ancillary expenses as court costs and lawyers fees too. If you’re ruled as “guilty” and have a judgment against you for a substantial sum, your umbrella coverage can protect you with a payment for any level of judgment that exceeds your underlying coverage- (up to the maximum amount of your umbrella coverage).

How it Works

Umbrella coverage is available in $1 million increments. Depending on your past history, the first million dollars of umbrella protection will usually cost around only $300 each year. Each additional $1 million of coverage will cost just another $100 or so.
Keep in mind that it only takes a second in which your eyes are off the road or where someone slips and falls on your property, to really get how important good umbrella coverage can be! Speak with an insurance agent today for more information.