I’m sure you may have heard the term umbrella policy, or umbrella coverage. Well today, I’m going to go over what an umbrella policy is, and if you need one.
Let’s start with some of the basics. The umbrella policy is a very exciting product. It’s a great deal in the insurance world, and I’ll explain that later. Let me just go over what it does for you.
An umbrella policy basically increases your limit of liability coverages and it covers essentially everything you own, whether it be personally or commercially, in case a lawsuit is brought against you.
An example of a personal umbrella would be that it covers your auto and your homeowner’s policy. It may cover a motorcycle you may own, snowmobile, a vacation home you may have, or a boat.
So it doesn’t just cover one item, it covers every item that you may own. And if you injure somebody, or you’re responsible for damages with result to anyone of those items, your umbrella policy would kick in.
Now the umbrella policy does two things. It increases your liability coverages. Typically, umbrellas will start at a million dollars of coverage and go up. That means on top of your basic liability package of your auto or home, or whatever else we’re covering, we’ll add an extra million dollar on top of that.
It also expands your coverage. The umbrella policies provide coverage for maybe libel and slander, wrongful eviction, wrongful detainment, all of those things are covered under your basic liability packages. But the umbrella policy expands your coverages, as well as increases all limits of coverages too.
The question is, do you need one? Well, that’s a conversation that you and your insurance agent should have. Nowadays, umbrellas are becoming more and more common, because liability suits are higher and higher, and medical bills and medical claims are higher.
We always recommend umbrella policies to our clients; again because it’s a very good deal. And I’ll explain that.
A typical umbrella may cost anywhere from $100-$200 a year for auto and home package. If you have young drivers, or have more vehicles or more items to add, the cost may increase from there. But it’s one of the greatest deals in the insurance world; very low costs, very high coverages.
So we definitely recommend it to our clients, and make sure you have that conversation with your agent to see if you need one, and how to go about getting one. But we do recommend umbrellas. They’re a great product when used properly and we certainly can answer any other questions that you have if you feel like getting into an umbrella.