Let’s face it in today’s society, lawsuits are everywhere. Courts are awarding larger amounts of money than ever. They range from serious injuries resulting from tragic accidents to seemingly silly disputes. In the past mostly the wealthy purchased umbrella insurance, but in today’s society no one can be sure what a judge will award in a liability claim. Home & Auto Insurance policies have a limit on liability insurance. If the day comes when you're served with legal papers, do you have enough liability insurance from your current policies to cover your costs for negligence? It’s imperative that you have insurance to cover your legal liability.
A personal liability umbrella policy can help you. Umbrella policies supplement the liability coverage you already have through your home and auto insurance and provide an extra layer of protection.
If you don't have enough liability coverage to resolve a claim or a lawsuit, the person bringing the action might go after your home or your other assets to pay for damage. Umbrella policies cover damage claims that you, your dependents, or even your pets may cause.
An umbrella policy will kick in after the liability insurance in your homeowners and/or auto policy is exhausted. Here is an example: If you have a home insurance policy with liability coverage set at $300,000, the umbrella policy will pay claims above that amount up to the limit selected. Most companies offer umbrellas from 1 million up to 5 million. If your liability limit on your auto insurance policy is $250,000 of bodily injury protection per person and $500,000 per accident, your umbrella coverage would kick in after you have exhausted your auto liability coverage.
Personal Umbrella policies are relatively inexpensive. In many cases you can buy a $1 million umbrella policy for less than $200 a year.
In most cases you will need to have your home and auto insured with the company issuing your umbrella policy. You may also need to increase your liability limits on your home and auto to meet the requirements of issuing an umbrella policy. Most commonly you will need to carry 300k of homeowners owners liability and 250/500 of auto liability.
