Personal umbrella insurance is a wise choice that will add financial protection for you and your family should you face a liability claim or lawsuit.
A personal umbrella policy extends over and beyond your other personal liability insurance policies. It will cover claims arising out of property damage or bodily injury to someone else caused by a member of your household.
An umbrella policy can provide additional coverage above your homeowners and personal auto insurance. For example, court costs, damage to others’ property, injuries to other parties, as well as the defense costs for a lawyer may be covered by your homeowners or auto policy. But the money available under that policy might not be sufficient to cover all your expenses on that claim. This is where your umbrella policy would kick in to assist.
A common, but difficult question to answer is how much umbrella coverage is necessary. This will depend on the assets you own. Many people believe that they are not at risk of an expensive liability claim as long as they don’t have significant wealth. Such thinking is dangerous. A plaintiff could go after your retirement savings or even the equity in your home. Being able to settle without touching those important assets is crucial to your financial well-being.
It is also important to understand the types of behaviors and activities for which an umbrella policy likely will not cover you. For instance, if you love watercraft use or snowmobiling, you may need a more specific type of policy that offers coverage for these types of interests. Talk with your insurance agent about your leisure pursuits to make sure you aren’t leaving serious gaps in your coverage.