Personal Umbrella Insurance Policies

Why an Umbrella?

Auto and homeowners policies provide adequate liability protection for many people. Why would anyone want to purchase an umbrella policy? The primary reason is to protect personal assets. Umbrellas provide an extra layer of liability coverage beyond that offered by homeowners, renters, personal auto, or standalone personal liability policies.

Your assets, nest egg, retirement savings… They could be at risk from legal liability claims if you do not have the right amount of coverage.

Consider this scenario: you're sued for $1.2 million after an auto accident or some other type of incident. But your insurance limits only cover up to $500,000 in damages. You are still responsible for the additional $700,000 unless you have a personal umbrella policy.

What is an Umbrella?

An umbrella policy provides worldwide liability coverage over and above that provided by underlying policies. For most individuals, your underlying policies will be an auto and homeowners policy. Typically umbrella policies are sold in increments of $1 million. They aren't designed just for the wealthy, they are very affordable.

Umbrella Requirements

Umbrellas are designed to provide coverage over and above that provided by underlying policies, except when they respond to covered occurrences not addressed by the underlying insurance. The requirement to have an umbrella is that you maintain underlying insurance within the conditions specified by the insurance company on their umbrella policy. Some insurance companies may specify amounts of underlying insurance. These amounts vary.

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