Exploring Umbrella Liability Policies

Many individuals, families, and businesses have been paying to insure their homes, vehicles, property, and other assets for years, but many do not realize that their belongings may not be sufficiently protected. For example, say that you are involved in an auto accident, and you are deemed liable for serious injuries to the passengers in the other vehicle. Accidents like this can often result in lawsuits that total hundreds of thousands or sometimes millions of dollars. A standard auto policy will protect you for $100,000-300,000 in liability coverage. If you are deemed liable for an amount greater than your insurance policy limit, your assets including your home, retirement funds, and even your future income can be seized in order to pay for damages. Although many view accidents like this to be a “worst case scenario,” it is important to protect yourself from such a serious risk.

For these reasons, insurance carriers have developed coverage’s called umbrella liability policies. Umbrella policies are increased liability insurance policies that protect all of your assets. Typically, these policies will protect you with $1-5 million of liability coverage. Keep in mind that this coverage works in combination with other insurance policies. For example, if you have a $250,000 liability policy for your auto insurance, and a $1 million umbrella policy, you are protected with $1,250,000 in liability coverage. Umbrella policies will protect you from bodily injury liability claims and property damage liability claims as well as legal fees, false arrest, libel, and slander.

The question to ask now is whether an umbrella policy is right for you. Families, individuals, and businesses with significant assets should strongly consider umbrella coverage, but everyone is encouraged to explore adequate insurance. Most insurance carriers have eligibility requirements for umbrella policies that require certain levels of preexisting coverage for underlying liability policies. Typically, these minimums are $250,000 in liability for auto insurance and $300,000 for home insurance. If you know that you currently meet these minimum coverages, you should strongly consider speaking with an agent about an umbrella policy. Many think that $1 million or even $2 million in protection would require extremely large payments each year. However, most Umbrella Policies cost between $100 and $500 per year. Our agents at J. Goodman Insurance Agency are experienced in assessing potential risks, and the need for umbrella liability policies. Our staff can carefully evaluate your current insurance policies, assets, and risk factors to determine if an umbrella policy is right for you.

August 12th, 2015 by J. Goodman Insurance Agency