By Harvey Brown Special to The Pineapple Question: When or why do you need an insurance umbrella? Answer: Over the years I’ve heard some people say that they think umbrella policies are only for the wealthy. This is not necessarily true. We encourage many of our customers to consider protect their assets better by having an Excess Personal Liability Policy which is known as an “Umbrella”. Anyone can have an auto accident or some other liability occurrence which may exceed their auto or home liability coverage thus putting their assets at risk. For just a few hundred dollars a year, you can buy $1 Million or more of additional protection thus giving you much greater financial peace of mind. Question: What is an umbrella policy? Answer: An umbrella policy is actually an Excess Liability policy. We will be talking about the Personal Umbrella Liability Policy in this article. The term “Umbrella” is used as it describes the function of this policy: it provides an extra amount of liability coverage that goes OVER your primary automobile liability insurance, homeowners liability insurance, and some other “exposures” you may have such as for a boat.
Question: What does it cost? Answer: The premium is based upon how many properties and vehicles you own and the limit of liability you select. The limits come in $1 Million increments. A typical $1 million dollar umbrella policy for a family that owns two cars and a home can cost between $200 to $300 a year. The premium is based upon the number of cars you own as well as the number of properties (and any other exposures such as boats). Higher limits will obviously cost more with each additional million dollars of coverage you select. Most of our Umbrella clients have $1 or $2 Million Umbrellas but we do have some who need as high as $20 Million limits in order to properly protect their assets.
Question: Why get one? Answer: As mentioned above, the purpose of an umbrella is to provide you with extra liability protection in case you are sued “successfully”. You could be sued for your negligence resulting in injuring someone (i.e. being at fault) in an auto accident or if someone should slip and fall at your home or be injured on your property due to your negligence. An Umbrella Policy provides you with at least a million dollars of additional protection over your primary policies. Also, don’t forget that you also will have the legal defense for covered suits provided by your insurance carrier on your primary auto or home insurance policies. With higher limits of protection our clients are better able to sleep at night knowing their assets are well protected. We encourage you to consider an Umbrella as part of your insurance program.
Next Month: Getting your Insurance Organized. The Harvey L. Brown Agency are experts in auto, home, business, life/health and represent over 40 companies. If you have questions or concerns about your insurance, call 561-276-0369 Monday-Friday 9-5pm.