Personal Umbrella Liability Insurance-What is it and do you need it?

If you were found liable for an accident, would your current insurance coverage be enough to pay for a judgment against you, or would your assets be at risk to help pay? “What about my homeowners and auto insurance? Don’t they cover me?” If you are sued, your standard homeowners or auto policy can provide liability coverage, paying for judgments against you along with your attorney’s fees, up to a limit set in the policy. However, if the judgment against you is for more than your insurance covers, you could be forced to pay a legal judgment from your current assets and future earnings. You might think this scenario is unlikely, but what would you do if it became reality? That’s where a personal umbrella liability policy can be beneficial to help you provide the protection you want.

With a Personal Umbrella policy, you’ll have additional liability limits over and above those provided by your underlying homeowner and auto policies. An umbrella policy can help prevent financial hardship by providing protection that you choose for both current assets and future earnings.

Umbrella Insurance Explained

So how can a personal umbrella policy provide the protection you want? This type of coverage offers additional protection above what your auto and homeowners policies will cover. For example, should you be involved in a car accident and sued, your auto policy covers you up to a predefined amount, your coverage limits. If the cost goes over that limit, your umbrella policy kicks in and covers you for an additional amount up to the limit on your umbrella policy.

You may also think that only those with a large amount of assets would benefit from an umbrella policy, but that’s not necessarily the case. Do you like to entertain? Have a pool? A large dog? You could benefit from considering an umbrella policy. Ultimately, if you or something you own accidentally causes damage to another person, you can be sued for more than just what you have in the bank. Any retirement funds, investments, savings and even future earnings can be at risk to pay for a settlement. In some states, the equity in your home can be part of the judgment and you may have to sell your home to pay for a judgment against you.

Regardless of your personal finances, if a situation arises where you may be held financially responsible for an accident, it could be beneficial to purchase an umbrella policy. A million-dollar umbrella policy is available for far less than you may think as well. Depending on your policies you can get coverage in Missouri or Kansas for as little as $120/yr.

Other Benefits

Besides providing increased liability limits, a Personal Umbrella policy can fill gaps in your coverage with added benefits, such as:

• Coverage for claims that may not be covered by your underlying Homeowners, Auto, or Watercraft liability policies, such as libel, slander, or defamation of character.
• Worldwide coverage.
• Paying for defense costs and attorney fees associated with claims against you that are covered by your Personal Umbrella policy, but not by your primary policies.

Protect your future with the coverage you want

If the unexpected occurs, do you have enough coverage to protect you and your family’s assets? Talk to me about adding a Personal Umbrella policy to your insurance portfolio. The added protection you choose with an umbrella policy can outweigh the minimal cost, and can be financially advantageous should you need it.