A personal umbrella policy is extended liability coverage for major lawsuits that threaten the retention of your assets and future income. It can supplement your existing bodily injury and property damage liability coverage, as well as provide additional protections not offered by other types of policies. Although umbrella insurance has a reputation for being a product for the wealthy, its role is much more extensive. In fact, most average-income individuals can benefit from an umbrella policy, whether to protect a retirement or college nest egg against litigation or to prevent years of wage garnishment if you cause an accident. At Billy Brown Insurance, we can help you assess your unique liability risks and determine whether umbrella insurance could be right for you.
How Umbrella Policies Work
When you are sued, your primary liability insurance – whether homeowners, renters, auto insurance, or some other policy – pays damages first. Often, high limits on these policies are enough to foot the bill for legal fees, out-of-court settlements, victim medical bills, property damages, and more. In the event that damages exceed the limits of your coverage, however, umbrella insurance can pick up where your primary liability protection leaves off.
A typical umbrella insurance policy provides a minimum of $1 million in additional liability protection, although some individuals may prefer greater limits to protect high-value investment portfolios and other financial assets. Even with these high limits, umbrella policies are typically very affordable for the average individual despite the tremendous asset and income protection they can provide.
Most umbrella policies cover a broad range of risks, such as:
- Property damage liability
- Bodily injury liability
- Libel, slander, and defamation
- False arrest
- Rental property liability
- Liability when traveling abroad
- And more
What umbrella insurance does not generally cover is personal losses or liabilities due to intentional or criminal acts. An agent here at Billy Brown Insurance can help you better understand the terms of your policy, including any exclusions in your coverage.
Do You Need Umbrella Insurance?
What would happen if your dog escaped your yard and caused a car accident that resulted in extensive vehicle damages and passenger injuries? Could you afford the legal fees and financial responsibility? What about a $750,000 lawsuit brought from an injured house guest when you only have $300,000 of maximum homeowners liability insurance coverage? How would you pay for the excess damages? Without umbrella insurance, you put your personal income and assets at risk. A judge could order the liquidation of your assets to satisfy judgments against you, or you may have to make payments from future wages instead. Either way, without the protection of an umbrella policy, you are more likely to be stuck with a bill for excess damages than you would with the right supplemental liability insurance.
An independent agent can help you determine if umbrella insurance is right for you. However, we typically recommend this important coverage to people who:
- Are saving for a major purchase
- Have retirement or college savings
- Expect to receive an inheritance or other windfall
- Travel often
- Own rental property
- Have extensive savings or financial assets
If you decide to purchase umbrella insurance, let the team here at Billy Brown Insurance help you find a policy that fits your needs. We can compare coverage and rates from leading carriers and also assist in helping you meet the insurer’s underwriting requirements, such as raising the limits on your primary auto or homeowners liability insurance.