A client of ours recently was involved in an unfortunate accident which has really reinforced our belief that most of our clients need an umbrella policy to protect their financial future. Most of our clients are unaware that standard limits on a homeowner’s or auto policy may not be enough!!

If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgments against you and your attorney’s fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That’s what a personal umbrella liability policy provides!

An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.

For only about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.

Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.

Still not convinced you need an umbrella policy? Check out the below real-life examples of umbrella claims:

• Dog bite suit exceeded liability limits and left the homeowners fending for themselves.
• Driver didn’t see a 4-way stop and T-boned another vehicle severely injuring multiple passengers in the other vehicle. Injuries went way beyond their $300,000 liability limit, and the driver REALLY wished they listened to their insurance agent and bought an umbrella policy
• An insured is a landlord who had a fire in one of their homes and 2 children were killed. The insured only carried a $300,000 liability limit on the property and had no umbrella despite owning a couple rental properties. The insured had to make a very large out of pocket contribution to avoid an even larger jury verdict against them well in excess of their liability limit.
• A driver was DUI and involved in an accident and killed the other party. The insured only carried a $100,000 liability limit and had some assets, although not significant (mainly some equity in their home). Given the DUI and the fatality, the insured ended up taking a second mortgage out on their home and paid $100,000 of their own money towards settlement.

As an added incentive to buy an umbrella policy, most of our carriers offer up to a 10% discount on your auto & homeowner’s premium! Contact us today for your free umbrella quote or to review your insurance protection.