A personal umbrella for a rainy day

Published 9:14 am Thursday, August 14, 2008

There are so many “rainy days” that people can experience — a sick child, a broken-down car or a late mortgage payment.

But what about a lawsuit?

These days lawsuits are being filed, not just against big corporations, but also against people like you and me. In the blink of an eye, you could be involved in a car or boating accident, or have someone become injured on your property that could result in litigation against you seeking thousands or even millions of dollars.

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Even though your primary insurance policies, such as auto, home owners, boat owners, etc., may provide substantial liability insurance coverage, it may not be enough. A Personal Liability Umbrella Policy provides additional amounts of liability coverage at an affordable price.

What is an umbrella policy?

A Personal Liability Umbrella Policy provides additional layers of liability coverage over the liability coverage of your underlying policies. Personal umbrella coverage amounts typically begin at one million dollars and can be increased in increments of one million dollars.

Here’s an example of how an umbrella policy could work: Let’s say your car is insured for liability with limits of $250,000 per person. You pull into an intersection, strike another vehicle and severely injure the other driver. This insured person sues you and the judgment against you totals $800,000. Your auto policy will pay the first $250,000 but an umbrella policy would respond for the next $550,000.

Also an umbrella policy often insures against some types of losses for which there is no coverage in the underlying policy. Examples of such loss include libel, slander and defamation of character.

Why have an umbrella policy?

The value of a personal liability umbrella policy is to provide higher amounts of liability coverage for an affordable premium. It can help protect the financial assets of your household when you need it most and can bring confidence knowing that you have the coverage needed to help protect your family.

To see if this is a policy that can benefit you, talk to your insurance agent.