Did you say Umbrella?
An umbrella can do more than just cover for rain, it can also help when it pours on you in a liability crisis. A Personal Umbrella policy is a type of insurance that provides liability coverage over and above your homeowner's and auto insurance. So, if your liability coverage isn't enough to pay for the damages caused by an accident you are responsible or a visitor's injuries on your property, a personal umbrella insurance policy kicks in where your underlying policy's coverage left off.
Personal Umbrella Insurance Policy in Action
The best way to explain how a personal umbrella policy works, is to give an example of how it can affect you. If you're at fault in a car accident that injures another driver, your regular automobile insurance may cover the other driver up to the limit on your personal auto policy, say $100,000. However, what happens if that limit is not enough to cover the other driver's resulting medical bills?
If the other driver's injuries are severe, you may be legally responsible for damages beyond the $100,000 your car insurance policy covers. Also, keep in mind that if he sues you, your personal assets could be at stake. Imagine if that injured driver were a highly paid professional such as a surgeon or another highly paid professional? What if the accident you caused resulted in an injury that kept him from doing his job for six months? Suddenly, he's suing you for $1 million to cover the six months he's away from work.
Your automobile policy's liability coverage may pay for up to $100,000 but where would you come up with the remaining $900,000? A personal umbrella policy can help cover the additional costs when your standard insurance policy isn't enough. An umbrella policy could provide the additional coverage you need so that you don't get stuck trying to pay the remaining balance yourself. This extra policy could help protect your bank account, home and other personal property.
Knowing Your Personal Umbrella Insurance Policy Options
In most cases, personal umbrella policies are available in million-dollar increments, from $1 to $5 million. While an umbrella policy is not required, it may offer increased protection in the unfortunate event of an accident. Contact an agent at Priority-One Insurance for more information about how a personal umbrella policy can further protect your family, so you can decide whether having additional liability coverage makes sense for you.