Who Needs Umbrella Insurance
If you have a lot of assets to protect, your regular home or auto insurance might not provide enough liability insurance coverage. You could choose to increase the liability limits on your home, auto, or other property insurance policies. However, an umbrella insurance policy might provide the extra coverage that you need and also provide some extra types of protection.
What is Umbrella Insurance?
This type of coverage gets its name because it broadens other types of insurance. For example, you might have a specified limit of liability on your auto or home policy. Once that coverage is exhausted, an umbrella policy might kick in to provide even more protection. It also provides additional coverage that you cannot find in typical property policies.
For example, some states actually require fairly low liability insurance limits for minimum required auto policies. This includes the maximum coverage for both property damage and injuries. If your car collides with a late-model car, and you only have $20,000 in property liability protection, you could be on the hook for a big bill after your auto policy limits get exhausted. If occupants of the other car get injured, the bill could even be much higher. If you have extra coverage, you should be protected from claims against almost any imaginable accident.
Typical umbrella policies might increase your coverage to a million dollars or more. This extra protection usually costs a few hundred dollars a year. Additionally, these policies may provide extra coverage types that are not found in basic policies. For example, you may now be covered for slander, libel, and even legal defense.
Do You Need Extra Insurance?
If you have assets or an income, this additional coverage can provide you with extra protection and peace of mind for a modest price.