How An Umbrella Works
Umbrella insurance is designed to kick in after the liability limits on your primary, underlying policies are exhausted. For example, if the personal liability limits on your homeowners policy is $300,000 and there is an accident in your home that results in major injury to a guest, the most the policy would pay is $300,000. In a lawsuit with a judgment of $1 million, the remainder of the payment would have to come from you – the homeowner. Could you afford this? A personal umbrella policy with $1 million limits would give you the peace of mind knowing you have extra coverage. In this case, your home insurance would pay the $300,000 and the umbrella would kick in the rest for a covered loss.
Umbrella policies are typically available with limits of $1 million, $2 million and $5 million, and are reasonably priced for the amount of additional coverage you are getting. In certain cases, personal umbrella insurance will also cover perils that your underlying policies won’t insure.
Our professionals can conduct a needs assessment to help determine the amount of personal umbrella insurance you need in the event of a catastrophic liability event. With today’s large jury awards and high medical costs, it doesn’t make sense to go without this added coverage.