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While surfing the web this past week, I came across an article on umbrella insurance and why some people should get it. I was curious, so I decided to look into it a bit more.
I don’t personally know of anyone who has an umbrella insurance policy, but then again I don’t go around asking people about their insurance coverage. It does seem like a useful insurance policy that can provide important protection, so I want to share what I learned.
What is umbrella insurance?
Umbrella insurance is basically extra liability coverage. Instead of protecting you from rain, like the name suggests, umbrella insurance is meant to cover any limitations you may have with your existing insurance coverage.
If you’re involved in a lawsuit where the judgement is more than what your auto or homeowners insurance policy covers, the difference would normally have to come out of your pocket. If you have an umbrella policy, though, it will cover the difference and protect your assets.
What does umbrella insurance cover?
Like many insurance policies, the details depend on what you sign up for. The are some surprisingly broad situations that umbrella insurance can cover for you. They include:
- Property damage liability – This covers any loss or damage to someone else’s property due to your vehicle, pet, or yourself.
- Slander/libel – If you make an injurious statement that causes someone a loss, your umbrella policy might provide some protection.
- Bodily injury liability – This covers any medical bills another person suffers due to an accident where you’re at fault.
- Legal fees and defense – This coverage almost makes umbrella insurance worth the cost itself. Attorneys can be expensive, and if you’re getting sued, having your legal costs covered can give you some peace of mind.
Is umbrella insurance expensive?
Apparently there’s a myth that umbrella insurance is only affordable to the rich. As it turns out, you can purchase umbrella insurance starting at one million dollars worth of coverage for as little as a few hundred dollars per year.
How much coverage should you get? Some people get enough to cover their assets, but if someone sues you for more than that amount, then you’re still left with a big bill. You may want to look at insurance coverage that exceeds your assets as a buffer. Don’t go overboard though, because excess insurance does help anyone – except your insurance company!
When looking at umbrella insurance policies, ask if there are personal liability limits that you’re required to have on your auto and home insurance. You’ll have to factor in the price difference if you upgrade your current coverage.
An alternative option to getting umbrella insurance is going back to your current insurance companies and seeing how much it would cost to raise your liability coverage. You may find that to be a cheaper option or at least more affordable for the time being.
Since prices vary by company, region, and customer’s circumstances, only you can crunch the numbers for your family and see if umbrella insurance is the right thing for you.
Finding Umbrella Insurance That Works For You
As with other insurance policies, it pays to do some research before you sign up for anything. You have to be prepared and know when to ignore a salesperson’s presentation and when to listen to useful advice.
Since you probably already have auto and/or home insurance, talk with your current agent to see what they can offer you. Ask them to break down the benefits and costs. Tell them that you need to sleep on it and think about it. Your next step is to shop around.
You can go online or call different companies, here are a few popular companies that sell umbrella insurance:
- Nationwide: 1-877-669-6877
- Geico: 1-800-841-4915
- Progressive: 1-877-777-1783
- Liberty Mutual: 1-800-837-5254
- Allstate: 1-866-621-6900
- Farm Bureau: Check for local listings
While there are many more options, going with a well known company can be a little more reassuring in the event you need to make a claim. Hopefully you’ll find a policy that offers solid coverage at a fair price.
Thoughts on umbrella insurance
I have to talk to my husband about this and see if we should look into it a bit further. I admit that it sounds like a decent option. Since this is a relatively new thing for me, I’d really like to hear your take on it.