An umbrella…it’s not just for the rain!

What is Umbrella Liability Insurance?

This is a separate policy, which can be purchased in addition to your home, auto, and other insurance policies. Umbrella liability insurance will provide additional coverage for you if you exceed the liability limits on your underlying policies (home, auto, motorcycle, boat, etc.) due to a covered liability loss. Most home insurance companies provide additional umbrella coverage that can be either added to your insurance policy or written separately. Umbrella policies are generally offered with limits in increments of $1million, with $1million being the most common limit chosen.

 

When will an Umbrella Policy take effect?

As long as the underlying liability limit requirements are met for your home and auto policy, the umbrella policy will respond to liability losses exceeding those limits. Most umbrella policies require your home

insurance liability coverage to be $300,000 or $500,000. The auto policy limits should be a minimum of $250,000 per person and $500,000 per accident. The underlying policies’ liability coverage will apply first, then any excess damages will be paid by the umbrella policy. If you or a family member is involved in an accident and responsible for serious injuries to another, your auto policy will respond with the coverages listed on the declaration page. For this example, let’s say there are 2 people with injuries that amount to $1 million. Your auto policy provides $500,000 per accident and the umbrella policy is $1 million. The first $500,000 will be provided from your auto policy. The remaining $500,000 of damages will then be covered by the umbrella.

 

The Importance of an Umbrella policy

Umbrella liability policies are usually inexpensive and available to almost everyone. With the rising costs of medical care and attorney’s fees, umbrella policies are becoming more and more important to have. Just having an auto policy or home policy can leave you with unexpected expenses if the damage amounts exceed the liability coverage on those policies. A court system may garnish your wages or place a lien on your property until damages are repaid. The more assets that you have or the higher your income potential, the greater the need to purchase an umbrella liability policy.

Contact FBinsure to obtain an affordable Umbrella policy today, for coverage that will give you peace of mind.