Do I Need an Umbrella Insurance Policy? Here Are Some Things to Consider
Standard auto, homeowner’s, and boat insurance policies cover liability a person may have for bodily injuries or property damage for which you are negligent. While limits of $100,000 to $250,000 may cover you for most accidents, there are cases where those limits aren’t enough.   If you have personal assets above those limits, you may be jeopardizing those assets.

Insurance companies offer personal umbrella policies to cover financially devastating events like these. These policies provide additional protection when an accident uses up the insurance amounts offered by the other policies. They also cover some types of losses that these different policies do not cover.

To determine whether or not an umbrella policy is right for you, you should answer the following questions:

First, do you have items that put you at a higher risk for a catastrophic loss? For example, do you have multiple cars or inexperienced drivers in your household? Household attractions like swimming pools, trampolines, and swing sets present exposure to severe losses. Boats, like cars, can cause serious injuries and damage if the operators are inattentive, intoxicated, or inexperienced.

Next, do you have any exposures that do not involve potential physical injury, illness, or property damage or might require different coverage? For example, do you or any family members participate in social media websites or online discussion forums? Does anyone coach a youth sports team, belong to the governing board of a non-profit organization, write computer code as a hobby, or give music lessons? These activities present different exposures to legal liability.

Third, do your underlying policies have high enough limits? How high are the liability limits on your homeowners and auto insurance policies?  Does your homeowner’s insurance cover any business activities? Do I cover family members accused of slander, libel, or defamation of character in online postings?

Lastly, an umbrella may cover volunteer activities, online statements, and specific business activities that a homeowner’s or auto policy might not cover.

Usually, the insurance company will require you to pay a deductible amount (such as $250 or $500) before it will pay for a loss that one of these other policies does not cover.

If you have any other questions about whether an umbrella insurance policy is right for you, please contact our office.