What is Personal Umbrella Insurance?
A personal umbrella policy is an insurance policy that provides an extra limit of liability over and above any underlying policies – like your home, auto, boat, and in some cases rental property insurance policies.
What does that mean?
Your auto insurance probably has split limits of liability, the most common is $100,000/$300,000/$100,000. (Read more about auto insurance and the limits HERE). That means if you are involved in an at fault accident and cause bodily injury to perhaps the driver and passengers in the other vehicle you have up to $100,000 per person but only $300,000 for the total accident. What if that is not enough? If you have a personal umbrella policy that policy will kick in and you will have at minimum another $1,000,000 over and above the $300,000. If there is not enough liability to pay for the accident your personal assets can be at risk. How far do you think $100,000 will go, particularly if the persons involved suffer injuries that keep them from working for months, or years? The accident victims could sue you for medical bills, lost income, even pain and suffering. In this scenario, $100,000 is not nearly enough coverage.
Guess what happens if, say, you are hit with a judgment for $250,000 in the case of one person involved in the accident. Your auto liability insurance will cover the first $100,000 -- and you're stuck with the rest. Again, that doesn't include the legal fees you have to pay to your attorney. And, in some cases you might have to pay all or part of the legal fees the other party or parties incur. Ouch.
If you don't have a combination of insurance and cash on hand to pay the judgment, the court can order liquidation of your assets (including your family's home!) In the state of New York, if you still owe money after these resources are exhausted, the court can order you to pay a percentage of your future earnings, called wage garnishment.
While it may seem unnecessary, it really isn't, particularly for people with homes and other significant assets to protect. Do you really want to hand over your home, savings or future earnings to someone you injure in an auto accident? It could happen. But it doesn't have to.
Umbrella Insurance: Peace of Mind Protection for Pennies a Day
Because it is designed for those very rare rainy days, umbrella insurance is very inexpensive. It is also versatile. Umbrella insurance provides additional liability coverage not only for your auto policy, but also your homeowners or renters policy, your boat policy, if you have rental property you may be able to include that as well.
If you have "toys" such as, motorcycles, ATVs, snowmobiles or a motor home, the umbrella coverage can be designed to provide additional liability protection for these possessions as well.
You can usually buy umbrella policies with $1 million limits for $150 to $250 per year, depending on the number of cars, homes, "toys" and young drivers in the household. If you need more than $1 million limits, you can usually buy each extra $1 million of coverage for $100 to $200. Think about this. For only a few hundred dollars, you can increase your per-person liability limits 5 times, 10 times, or more -- and it applies to your auto, homeowners or renters, and "toys” as well.
Our licensed agents will be happy to assist you in reviewing your options and finding the best combination of coverage and value for your budget and your family's needs. You can read more about personal umbrella policies in the insurance quotes section of our website or just enter your zip code above to get started.