Professional Insurance Programs

What You Should Know About Umbrella Coverage

On a typical rainy day, you may get by with a raincoat. But when it pours, you need an extra layer of protection to shield you from the storm — that’s where an umbrella comes in handy. This is a good picture of how insurance works.

Most insurance policies cover typical perils that you may face — your home gets damaged, or you have a minor fender bender in a parking lot. But what happens if you’re at fault for that accident and the other driver sues for $1 million when your liability limit is only $300,000? If the other driver wins the lawsuit, you’d be responsible for paying the balance. Wouldn’t it be nice to have an umbrella to shield you from this type of storm?

The umbrella policy is aptly named — it gives you added coverage on top of your personal insurance (like homeowners, auto, watercraft, or motorcycle). But how does it relate to you and your current insurance policy? Here’s a basic overview to help you understand the coverage.

  1. What is it?

The umbrella policy provides higher limits to give you extra liability coverage to pay for injuries and damages others sustain due to your negligence. For example, say you are found negligent in an auto accident and required to pay for the resulting bodily injury. Once you reach the limits of your primary insurance policy, the umbrella kicks in to cover the additional costs above that, up to your limit.

  1. What does it cover?

The policy applies to you and others living in your household, including a spouse, children, or others in your care. It extends the liability limits of your primary insurance policy, including auto, homeowners, watercraft, and recreational vehicle liability; and personal injury liability such as libel, defamation of character, false arrest, and more.

In addition, the coverage follows you, meaning you’re protected worldwide. The most common limit for an umbrella policy is $1 million, but higher limits are available.

  1. Why do I need it?

The more assets you have, the more protection you need — particularly when court awards are trending increasingly higher. An umbrella policy offers that extra layer of security. Plus, the added protection is valuable if you add a teen driver to your insurance policy. A majority of the claims covered by umbrella policies involve auto losses, so having an umbrella policy can give you peace of mind when your teen driver is on the road.

  1. How do I get it?

Umbrella insurance is relatively inexpensive, especially when compared to the amount of coverage you receive. Contact us at 800-637-4676 or to learn more or to purchase an umbrella policy.

Source: Secura