Umbrella Policies are for rain, right? Nope, click here to see how they can save your neck!

Umbrella Policies are for rain, right? Nope, click here to see how they can save your neck!

Liability insurance pays if someone gets hurt on your property, in an auto related incident, or because of the actions of family members. Most insurance polices have a maximum liability limit of $300,000, but nobody sues for $300,000 in today's litigious society. An Umbrella used to be a policy for the very wealthy, but in this day and age, most liability claims start at $1 million. They extend your liability coverage to your home and auto policies. However, be aware that just like your regular insurance policies, intended acts are not covered, nor are judgments against you when punitive damages are awarded.

The good news is umbrella policies aren't expensive. Umbrella policies usually start around $200 to $300 a year. Raising your current deductibles can help offset some of the additional premium cost. Some policyholders purchase umbrellas according to their net worth which is the only way to purchase a policy. It does not make any sense to buy a $1,000,000 umbrella if your net worth is $5,000. However, for no more than it costs, having the peace of mind in knowing that not only are you protected but the one you might injure is also protected is well worth the price.

You will want to have all of your coverages, home/auto/boat/atv's etc with the same carrier as who your Umbrella policy is with. The reason behind this is in the event of an accident, you do not want to end up in a situation where you have 2 separate carriers fighting it out over whose responsibility it is to pay the claim. What you will find is most carriers will insist on writing the umbrella as well due to this exact reason. Very rarely will you find a carrier who is willing to provide an umbrella when they do not write the underlying policies.

It's worth the time to sit down and evaluate your current limits and assets. With the help of your insurance agent, you can determine the appropriate umbrella to shield you more broadly than your primary coverage currently does. By making a few small tweaks to your existing policies you will find that not only are you better protected but your overall costs did not raise much.

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