What is Umbrella Insurance?
Umbrella insurance is a term for insurance that sits "over the top" of your auto and homeowner's insurance policies. It supplements your existing policies and provides increased protection to your current assets as well as your future income. Unlike pure "excess insurance," which kicks into gear only after all the underlying insurance policies have been exhausted, umbrella insurance can also fill in any gaps in coverage between other insurance policies.
How Much is Umbrella Insurance Worth?
Most umbrella insurance policies are sold in increments of one million dollars. A one million dollar umbrella insurance policy, coupled with an already-existing auto insurance policy with a $300,000 liability limit, will afford $1,300,000 liability coverage in most auto liability situations.
What Type of Coverage Does Umbrella Insurance Offer?
Umbrella insurance is a liability coverage, which means that if any mishap has been deemed your fault or responsibility, the liability insurance will cover expenses that would otherwise have to come out of your pocket. Umbrella insurance can come in handy in all kinds of situations, including the following:
- You are found to be at fault in a car accident on a residential street that results in a fire causing $800,000 worth of damage to a home. Your auto insurance policy has a $100,000 liability limit. The umbrella insurance, which you have obtained in a one million dollar increment, would take care of the remaining $700,000.*
- You host a party at your own home and a guest falls down some crooked stairs. His medical bills amount to $700,000, and you are liable. Since your homeowner's insurance policy has a liability limit of just $500,000, your umbrella insurance opens up to take care of the extra $200,000. *
- You're at fault in a car wreck with a woman whose injuries prevent her from ever returning to work. A jury decides to compensate her with $3 million, all of which is supposed to come from you. Fortunately, you've purchased five million dollars worth of umbrella insurance, which means you get to hold on to your paychecks, your home, your car, and all your other assets.
How Much Does Umbrella Insurance Cost?
Think umbrella insurance is an exorbitant form of added security that only the wealthy can afford? Think again. It's actually quite affordable, costing as little as $150 annually for the first million dollars in coverage.
Call or contact Mathews Insurance, Inc. today about how an umbrella insurance policy might help to keep you high and dry when life brings an unexpected storm.
*All umbrella policies have limitations and exclusions. The examples here do not supersede insurance policy language. If you have umbrella insurance, you should check the policy language or check with your insurance agents for any applicable limitations or exclusions.