Why Do I Need an Umbrella Policy?

This is not your rainy day umbrella.  An Umbrella Insurance policy gives you additional coverage over your vehicles, homes and toys.  If you are ever held responsible for damages or bodily injury, an Umbrella helps protect your assets.  This policy covers you above and beyond your auto and home insurance.

If you or a household family member cause a car accident that results in significant damage, bodily injury or death, you want this protection.  Imagine you rear-end a surgeon and he breaks his arm in the car accident.  He has permanent nerve damage and cannot work in the same capacity any longer.  The surgeon will sue for medical, pain and suffering, and loss of wages.  Your car insurance will pay out first and then the umbrella kicks in up to its limit.  If you have $250,000 of Bodily Injury on your auto policy and he sues you for $1 million, where will you get the extra coverage?  An UMBRELLA!  

Need more examples of why you may need this protection: your dog bites your neighbor’s child, a guest slips on a wet floor or broken stair and breaks their leg, or a child is injured in your swimming pool.  If you own a rental property you definitely want an umbrella to protect you against the claims that can arise from the tenant’s guests.  Maybe while driving your boat you hit a water skier and cause serious injury.  Umbrellas may also cover you for libel or slander lawsuits.  

Your auto or home policy will always pay out first.  If the judgement against you exceeds the limits on these policies, this is where your Umbrella comes in.  Keep in mind, that your underlying policy limits must be kept at a minimum level (usually $250,000/$500,000/$100,00 on your cars and $300,000 on your homes) so check with your insurance company and be sure to maintain adequate limits.  Umbrellas will also cover your legal defense fees.  

If you own assets or earn a wage, we suggest having an umbrella.  This is another layer of protection that usually only costs a couple hundred dollars per year.  Most policies start at a minimum of $1 million in coverage but higher limits can be purchased.  You do not need a million dollars in assets to need a million dollar umbrella.  Liabilities and defense costs quickly add up, having an umbrella gives you peace of mind.