Understanding Umbrella Insurance

There’s auto, home, life, disability, long-term care, and the list goes on and on for insurance products these days. Which insurance products you need depends on a multitude of factors that you can discuss with your local insurance agent. However, it is best to be educated on your family’s options. Here is basic information on umbrella insurance:

WHAT IS UMBRELLA INSURANCE? It is additional coverage beyond what’s provided by your policies, to further protect the insured against certain liabilities. It provides additional financial protection in the event your other policies are exhausted. As an example, a driver with liability coverage of $20,000 gets sued for $500,000. If the driver has an umbrella policy for, say, $1 million, the umbrella coverage will cover what the auto policy cannot.

DO I NEED UMBRELLA INSURANCE? Like all insurance, it depends on your family’s unique financial situation, as well as how much risk you are willing to assume yourself versus transferring that risk to an insurance company. With our society becoming more litigious, the worry of a lawsuit due to a car accident or accident in your home may encourage you to consider more coverage.