When you have umbrella insurance, you’ve given yourself extra liability protection in addition to your homeowners or auto coverage. It protects you in the event of a very large bodily injury or property damage claim or lawsuit. It becomes operational when your primary policy limits are exhausted. Depending on your policy language, your umbrella coverage might also protect you from claims or lawsuits involving defamation, false arrest or imprisonment, or invasion of privacy.
It’s not just for rich people. Somebody might tell you that umbrella coverage is only for the wealthy, but that’s not an accurate statement. If you have a steady job, a family, and a home, you’ll want to protect them with umbrella coverage.
Let’s say you have auto coverage with a $300,000 policy limit, but in a matter of a few short distracted seconds, you go through a red light and broadside a vehicle in the intersection. That crash could bring a jury verdict of $700,000. The first $300,000 would be paid by your insurer, but you’re going to be personally responsible for the $400,000 balance. It’s perfectly legal for the injured party to then levy on your assets and even garnish your earnings in the future. Those are pretty good reasons for umbrella coverage.
Umbrella coverage is surprisingly inexpensive. Pack that umbrella coverage in with the same insurer that covers your autos and home, and it’s likely to be even less expensive.
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