What is a Personal Umbrella Policy?

What is an Umbrella Policy?  Buy it before you get sued!


If insurance is for a rainy day, umbrella insurance is for a storm! It’s for the day someone hits you with a massive lawsuit for hundreds of thousands, even millions, of dollars.

Think it can’t happen to you? Do you know how lawsuit-crazy this country is? You can’t pick up a newspaper today without reading how somebody sued somebody else for . . . what? You read the article and say, “That’s crazy. There’s no way somebody should be able to sue for that.”

Well, guess what? The courts are clogged with these “crazy” lawsuits, and sometimes the person bringing the lawsuit wins. Do you really need coverage for these crazy lawsuits?

Some of these lawsuits aren’t crazy at all. Some get settled. Actually, most get settled. Often, the person being sued winds up paying something to the person who brought the lawsuit. And that doesn’t even include the fees the defendant in the lawsuit has to pay to his or her attorney.

* Example.  Say you’re at fault in a car accident that causes serious injuries to the driver and/or passenger(s) in the car you hit. Your car insurance has liability coverage of $100,000 per person and $300,000 per accident.

Homeowners insurance plus a personal umbrella policy

Homeowners Insurance

How far will $100,000 go when the person or persons involved suffer serious injuries that keep them from working for months, even years? The accident victim(s) could sue you for their medical bills, lost income, even pain and suffering. In this scenario, $100,000 is not nearly enough coverage.

Guess what happens if you are hit with a judgment in the case of $250,000 for one person you injure in the accident? Your car liability insurance will cover the first $100,000 — and you’re stuck for the rest. That doesn’t include the legal fees you have to pay to your attorney. In addition, in some cases, you might have to pay all or part of the legal fees the other party or parties incur. Ouch.

 Personal umbrella insurance is for these very rainy days. While it may seem unnecessary, it really isn’t, particularly when you have a home and other significant assets to protect. Do you really want to hand over your house, bank account and/or gains in the stock market to someone you injure in a car accident? It could happen. But it doesn’t have to.

Your fault auto accident

New York Auto Insurance

Umbrella Insurance is Massive Protection for Pennies a Day because it is designed for those really rare rainy days, umbrella insurance is very affordable. It is also versatile. Umbrella insurance provides additional liability coverage not only for your car policy, but also your homeowners or renters policy. Umbrella insurance actually “sits” on top of your car insurance and homeowners or renters insuranceliability coverage. Say you have a per-person liability limit of $100,000 on your car policy. Say also that you cause an accident in which a driver or passenger in the other car is ultimately awarded $250,000. Your car policy will pay the first $100,000, and your umbrella will kick in the remainder.

* Free Tip.  Your umbrella policy is usually a less expensive option than increasing the limits on your car and homeowners insurance. Be a smart consumer…but don’t try to be your “own agent.” Saving 15% in 15 minutes could be the most costly mistake you every make! Protection for you and your family requires constantly vigilance and a partnership between you and your professional insurance agent