Homeowners, auto and other policies have a limit on liability insurance. If an unfortunate accident should happen that is your fault, do you have enough liability insurance from your current policies to cover your cost for negligence? Since no one can predict how much a judge may award the injured person, umbrella insurance is not just for the wealthy anymore, but a needed protection for every policyholder.
Umbrella insurance is designed to give you added liability protection above and beyond the limits on homeowners, auto and other personal insurance policies. With an umbrella policy, depending on the insurance company, you can add an additional 1-5 million in liability protection.
This protection is designed to “kick-in” when the liability on the primary policies have been exhausted.
Typical auto and homeowners insurance liability limits are not adequate to cover the large court judgments being awarded these days. In addition, even though your basic policies normally cover defense costs, once the policy limits have been paid, the insurance company may no longer have an obligation to pay for the rest of your defense. So if you’re involved in a large lawsuit, not only might the amount of your insurance be inadequate to pay the entire judgment, but you could be responsible for the cost of your own defense.
There is good news. A personal liability umbrella insurance policy can give you added liability protection without a large added cost. Additional liability insurance is often inexpensive, especially compared to the added coverage you gain. Furthermore, liability insurance covers your non-business activities anywhere in the world. Having the added protection of a liability umbrella policy is coverage no one should go without.