Personal Umbrella Insurance Covers You For a Rainy Day
Posted by Taylor Patrick on Fri, Dec 23, 2011 @ 09:11 AM
What is an Umbrella Insurance Policy?
To put it simply – An Umbrella Insurance Policy is one that provides excess and/or broader limits over the coverage provided in the underlying policies (usually a home or auto policy).
What are the benefits of a personal umbrella policy?
1) We live in an overly litigious society and jury awards have continued to increase over the years.
2) Protection of present and future income. If you cannot afford to pay what you are liable for, it will be coming out of your paycheck for the forseable future.
3) Moral obligation to those we injure. Sometimes we are responsible for causing harm to another, even if it was unintentional. We should want to make sure they are taken care of.
4) In some cases umbrella policies can provide broader coverage than the home or auto, closing potential gaps in coverage.
5) Peace of mind.
Some things to keep in mind about umbrella insurance policies.
Most umbrella policies require “underlying limits” that to be at a certain level, which may be higher than you currently have. For example, if you currently have liability limits of 50/100 on your auto policy and you want an umbrella, you may have to increase those limits to 250/500 in order to qualify.
If you have insurance in another state, the umbrella policy might require that they pass muster with independent rating firms such as A.M. Best.
What are the limits available? Umbrellas typically fall in the range of $1 million up to $5 million. The base price for an Umbrella Insurance policy is typically around $150.
Have any other questions about personal umbrella insurance? Feel free to contact SIA.