Why Having An Umbrella Policy May Be Right For You
Personal umbrella insurance policies are used to increase the amount of liability coverage you have. It sits on top of the policies you have for your car, home, boat, motorhome, ATV, and so on. This type of policy is for people who want to be well protected in case something happens as someone gets hurt in their home, they cause a major car accident, or they accidentally cause someone to fall off their boat and drown.
When you buy an umbrella policy, it’s easier if all the underlying policies are insured within the same agency, we can look into comparison rates for you in that is the case. However, you can still get this type of policy if you have policies with other insurance carriers. You just need to supply what is insured, policy numbers, the amount of liability on those policies, and other details.
Umbrella policies start with $1 million in liability coverage. Most insurance companies can offer up to $5 million in coverage, in $1 million increments. If someone sues you and the damage exceeds the underlying policy, the umbrella coverage kicks in. If the underlying policy only has $250,000 liability and you are determined to owe them $1 million, for example, the umbrella policy will cover the extra $750,000.
Umbrella policies require that the underlying policies have certain minimum liability limits. Your car, for instance, might need to have $250,000 liability coverage on it at a minimum and your house $300,000.
There are several factors that go into how much an umbrella policy costs. The ages of the people in the household affect the premium. So does being a landlord, volunteering consistently for a charity, is a participant in a sport where you could injure someone else easily, and so on. Anything that increases your exposure to getting sued will increase the cost of the umbrella policy.
Umbrella policies provide additional peace of mind that if you accidentally injure someone your assets won’t be at risk. Like other insurance policies, you are transferring your risk to an insurance company in exchange for paying them money.