When you own property—be it a home, a car, or a boat—having adequate damage and liability insurance is essential. But if you’re responsible for property damage or bodily injury to someone else, your coverage may fall woefully short.
Umbrella insurance provides liability coverage beyond most property insurance policies. This includes coverage for damages caused by you and members of your household, as well as limited coverage in the event you’re sued.
Who is Umbrella Insurance For?
Although umbrella insurance is of particular value to affluent individuals with significant assets to protect, nearly anyone can benefit from the extra coverage. In general, those making $250,000 or more a year should consider at least a minimal umbrella policy, especially as premiums are relatively low.
Is It Worth the Extra Expense?
Umbrella insurance is on the cheaper side because you generally have to exhaust your underlying policies before it kicks in, whereas selecting higher liability coverage on individual policies can quickly become cost-prohibitive.
Purchasing Umbrella Insurance
A general rule of thumb is to have total liability coverage worth one to two times your net worth across your umbrella and regular policies, like homeowners and auto insurance. The good news is that it’s relatively cost-effective, as little as a few hundred dollars a year for $1 million in coverage.
Next Steps
Want to make sure you have adequate coverage? Please contact us or ask at your next meeting.