Mountain View Insurance – Umbrella Insurance
Umbrella Insurance is also referred to as Personal Umbrella Insurance which is a important distinction to consider. These types of policies protect you against lawsuits stemming from personal issues such as car insurance, home insurance, etc. They do not extend coverage to business incidents. So please note that there are separate business umbrella policies available.
Umbrella Insurance – How it Works
Personal Umbrella Insurance covers you in case of a lawsuit stemming personal some personal incident. Car accidents are one of the largest contributors of lawsuits where umbrella policies come into play. How it works is this:
- Your underlying coverage (auto or home insurance) kicks in first when a lawsuit occurs
- If that coverage is “tapped out” or exceeded then the umbrella policy kicks in.
The purpose of the Umbrella policy is to protect your assets in the case of lawsuit. Assets such as property, investment accounts, current wages, etc. Remember this is focusing on the personal umbrella liability protection – not business.
Umbrella Insurance – The Requirements to Purchase One
As we reviewed in the previous section, the underlying coverage is the first line of defense in the case of a lawsuit. For instance, if you are sued due to a car accident, the car insurance policy is protecting you from liability. If that coverage is exceeded through the lawsuit then the umbrella policy steps up. Because of this there are requirements in order to purchase an umbrella insurance policy.
- Car Insurance Liability Limit Requirements: $250,000/$500,000/$100,000
- Home Insurance Liability Requirements (varies) $300,000
- Rental Property Liability Insurance Requirements $300,000
Umbrella Insurance – The Cost
Usually Umbrella Policies cost between $200-$400. This is the cost of a typical $1,000,000 coverage policy Of course, as the amount of underlying policies increases the price of the umbrella increases as well. They also consider the amount of drivers in the household and their age. Sometimes they will audit a households driving record to even take on the risk in the first place.