Umbrella Insurance
What is it?
Who needs it?
Do You need it?
Lets break it down…
An Umbrella policy is always going to be in addition to your underlying policies. This could be your homeowners, auto, boat, ATV, rental properties, anything that’s in your name. Meaning if your policy is under an LLC, we can not add that building under the umbrella.
Think of the umbrella as an add on. If you have half a million dollars of liability in your home and you have an umbrella for a million dollars, you now have 1.5 million of liability. The important thing about an umbrella is it’s less expensive to add other policies under it than to raise the limits of the underlying policies liability in general as a prepaid legal expense.
Aren’t I already covered?
It is assumed that an umbrella policy is like personal liability. If you get sued, it comes into play. So like I call it defamation of character. Someone says something nasty on Facebook. That’s not how umbrellas work.
How much umbrella coverage do I need?
It is very difficult to figure out how much liability you need, and really comes down to how much coverage you are comfortable with. Some people like a million dollars, some like five million, some wont sleep at night unless they have ten million. It does not matter because again, it’s very hard to predict if you ever got sued, how much of a legal expense you would have to either settle that lawsuit or to fight that lawsuit.
An umbrella is a very important part of your insurance portfolio. If you have children driving, if you have a pool, if you have rental properties etc. If you have any risk that starts to increase your liability, you need to get an umbrella. I believe everyone who buys a home should have an umbrella. That’s just my personal opinion, but its better to be covered and not need it than to need it and not be covered.
