An umbrella insurance policy provides supplemental liability protection to cover you when your existing policy reaches its policy limit. This extra layer of protection can shield your personal assets from large claims beyond what your standard policies offer.
Your standard policy, home and auto, will offer coverage first in the event you are in an accident and you are at fault or a guest gets hurt on your property. If the total damages and legal costs are higher than your primary policy’s limit, the umbrella insurance policy will provide the additional funds needed to pay the outstanding amount owed in the claim.
An umbrella insurance policy usually has a broader application than your traditional home and auto policies. Areas where an umbrella policy can provide protection include: bodily injury, property damage, personal injury, legal defense costs, uninsured or underinsured claims.
Who Should Consider Having an Umbrella Insurance Policy?
Individuals who have a high net worth are encouraged to purchase an umbrella insurance policy so their assets are protected from a large lawsuit. If you have large managed risk, such as being a landlord, you may want to consider having an umbrella insurance policy. One of your tenants could place a claim against you if they get hurt in one of your rentals. Having high-risk assets also warrants having an umbrella policy. If you own a golf cart, side by side, dirt bikes or have a swimming pool in your home, and you have kids, you may want to consider an umbrella policy. Your kids’ friends can get injured while enjoying your fun toys, even when you are home. An umbrella insurance policy gives you peace of mind so your assets can be protected.
Does an Umbrella Insurance Policy Cost Extra?
Yes. You will pay extra to have an umbrella insurance policy added. The price is dependent on your limits. Most people start with $1million in coverage. This expense is in addition to your annual auto or homeowners insurance premiums. You must have existing auto or homeowners insurance policies to be eligible for purchasing an umbrella insurance policy.
We invite drivers and homeowners to give us a call for more information. We are happy to meet and discuss the umbrella policy option. It is not required to carry an umbrella policy, but we strongly recommend it if you fall into those areas of being a high-net-worth person, one who entertains in their home, or has kids who entertain.
In our conversations with clients, we explain the differences between an umbrella insurance policy and their auto insurance policy. When you purchase an auto insurance policy you have choices. You can select from a variety of coverages. Some of the more common ones vehicle owners opt to include are as follows:
•Liability coverage – bodily injury liability, property damage liability
•Coverage for you and your vehicle – collision coverage, comprehensive coverage
•Coverage for you and your passengers – uninsured motorist coverage (also known as underinsured motorist coverage), PIP
•Other optional coverages available include – roadside assistance, rental reimbursement, gap insurance
Policy owners will have a minimum deductible they will have to pay out of pocket before the auto insurance policy coverage will start when a vehicle is involved in an accident. When we meet with clients, we review these options as well as explain the coverage limits. You have options when it comes to the amount you are looking to have the insurance policy cover. The numbers in your coverage refer to the maximum amount your insurer will pay out for each type of claim. For example, a policy that has $100K/$300K/$100K liability coverage limits, means the insurer will pay up to $100,000 per person per accident, $300,000 in bodily injury coverage per accident and $100,000 in property damage coverage per accident.
When pricing an umbrella insurance policy, you want to look at the additional coverage as a whole number that you will receive for the one additional fee.
Still have questions? Don’t hesitate to call our Mount Dora, Florida insurance office at 352-357-1994 Monday through Friday between 8am and 5:00pm. Any one of our agents would be happy to assist you.