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Insurance Tips

Q. Why would I need a personal umbrella policy? What is an umbrella policy?

A. It is extra liability protection over and above your current liability coverage on your auto, homeowner, or renters’ policy. You must have a policy covering home, rental or auto in place to buy a personal umbrella policy.

What it covers; liability and defense costs over your primary insurance policies. It covers injury to others or damage to their property—it doesn’t cover your own home, auto or possessions.

It’s a good decision, especially if you have teenagers. If they were to cause an auto accident or property damage to others, the umbrella coverage would kick in once your primary coverage has paid its limit. Example: a person is injured in an auto accident caused by your teenager. The injured party has medical bills costing $625,000. Your auto policy pays $500,000 in medical expenses per person/per occurrence. The umbrella policy would pay the additional $125,000. You have the piece of mind that you are not personally liable for that $125,000 in medical costs to the injured party.

Keep your investments, IRA’s and from losing your home, by investing in an umbrella policy. If you have significant assets or a high-risk of a lawsuit (teenagers, home swimming pools/hot tubs, even social media use or if you are an executive or have a high level leadership role) it can offer peace of mind as well as financial protection.


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