Do you own a swimming pool? Do you have a dog? Do you host parties and gatherings in your home? Do you drive long distances or in inclement weather conditions? All of these things significantly increase your risk of being sued for another person’s losses or injuries. Anyone – including low-risk individuals – can be sued, if for no other reason than bad luck.

Whether you accidentally hit a cyclist with your vehicle or someone nearly drowns in your swimming pool, you never know when you might be served with a lawsuit. Unfortunately, high-limit liability coverage might not be enough to cover a major loss. Once the limits on your home or auto insurance are exhausted, you could get stuck with a huge bill that wipes out everything you own.

Fortunately, an umbrella policy can save the day when you need extra liability protection that goes above and beyond the limits of your primary coverage.

Understanding Liability and Umbrella Insurance

Your home and auto insurance contains liability protection for things like property damage, injuries, and accidental death. In many cases, a high-limit policy is enough to cover small and moderate damages, such as a fender bender or a few small medical bills. When disaster strikes, however, judgments and legal fees can turn into hundreds of thousands and even millions of dollars. In these scenarios, umbrella insurance provides a safety net, picking up where your primary liability insurance leaves off.

Umbrella insurance is often mistaken for excess liability coverage. Though similar, these are two very different insurance products. Excess liability extends the limits of existing liability coverage, but it can be restrictive on the types of damages that are covered. A true umbrella policy, on the other hand, extends liability and also broadens the types of damages that are covered to include personal liabilities like:

• Slander
• Libel
• False arrest
• Overseas damages
• And more

Purchasing Umbrella Insurance

Most umbrella insurance policies are sold in coverage increments of $1 million, with as much as $5 million available for purchase. Despite the large coverage value, umbrella insurance is surprisingly affordable, with a million-dollar policy starting at less than $200 per year in most cases. In many cases, each additional million added in coverage is more affordable than the first.

If you already have liability coverage through your auto, home, renters, or condo insurance, you will likely qualify for an umbrella policy. However, most insurers require that you have a minimum of coverage on your primary policies, including:

• $300,000 or $500,000 homeowners liability
• $250,000/$500,000 auto bodily injury liability OR
• $300,000 combined single limit (CSL)

Do I Need Umbrella Insurance?

If you have an income, plan to have a future income, will receive an inheritance, or have accumulated significant assets, you may benefit from umbrella insurance. Contact the team here at Wolfgram Insurance to discuss your options and find out if this coverage is right for you. We can answer any questions you may have and also show you how to capture additional savings by purchasing your umbrella and homeowners insurance from the same carrier.