If someone ever sues you, your auto or homeowners insurance may provide some liability protection. You can use these funds to pay judgments levied against you, as well as attorney’s fees and other related expenses (up to your predetermined policy limit). However, you can’t be too careful in today’s litigious society. To truly protect your family’s assets, consider getting a greater amount of liability coverage than what your current policies provide. The best way to purchase extra protection that goes well beyond your existing policies is with a personal umbrella liability policy.
Your umbrella coverage goes into effect once you use up the other liability protections in your standard policies (such as auto, homeowners, condo, and renters insurance). Your umbrella policy also protects you against certain other judgments (slander and libel, for example). In our modern, litigious society, these protections could mean the difference between bankruptcy and smooth sailing.
You can purchase a typical personal umbrella liability policy worth a million dollars for $2-300 a year. You can pay an extra $75 to get another million; additional millions typically cost $50. Check with your independent insurance agent for the exact figures and conditions that apply to your situation and location.
Because your personal umbrella insurance kicks in after you exhaust your underlying coverage, you must meet certain coverage limits to qualify. If you want to purchase umbrella coverage, your insurer will likely require you to own around $250,000 of liability coverage via your auto insurance plan. You will also need roughly $300,000 of homeowners liability insurance before your insurer will offer you umbrella liability coverage in the $1 million range.
If you want to give yourself and your family the strongest and widest possible coverage to cover all eventualities (especially expensive legal judgements, fines, and attorney fees), be sure to get an umbrella insurance policy. Talk with your independent insurance agent about your pricing and coverage options to get the best possible umbrella insurance plan for your unique needs and risks.
You’ll be so glad you did!