Personal Umbrella Insurance

Umbrella Covers the Big Risks

Do you ever wonder if your family has enough insurance to cover a large insurance claim against you? And do you know where the money would come from, if you weren't adequately insured?

Insurance professionals increasingly recommend a personal umbrella insurance policy, which kicks in when a policyholder reaches the limit on the liability coverage in their home or auto policies.

Consider the risk in the following scenarios:

• Your teenage son is in a car accident, and you get sued for $1 million.
• A neighbor is injured in your swimming pool.
• A passerby trips and falls on the sidewalk at your house.
• Your dog bites a friend's child.

What's My Exposure?

Today, anyone can be sued, and million-dollar judgments are becoming more common. And, alarmingly, any amount exceeding your standard liability policy would fall to you. In order to cover the costs, you could be forced to use money from your current assets, such as savings accounts, 401(k)s or even your home. And your future earnings could be jeopardized as well.

So, while these types of catastrophic events are unlikely, insurance companies offer personal umbrella policies for customers who want to protect their assets and feel more secure. The Hartford offers umbrella policies with $1 million, $2 million and $5 million in coverage. Since these types of events are rare, personal umbrella insurance is relatively affordable.

How Umbrella Insurance Works

If there is a covered liability claim under your auto or homeowners policy and the dollar amount of the judgment is greater than the coverage limits you have purchased on those policies, the personal umbrella insurance policy goes into effect. Certain limits must be met on your auto policy before you can purchase an umbrella policy.

The big question is often: How much coverage should I carry? The answer usually depends on your net worth. Counting up your home value, stocks, mutual funds and retirement accounts is the first step.

Personal umbrella insurance can vary depending on your situation and your individual needs. Call an insurance specialist at 1-888-413-8970 to learn if a personal umbrella insurance policy is right for you.