Personal Finance Essentials
Key Benefits of Umbrella Liability Insurance
Comprehensive Protection
An umbrella liability policy provides at least $1 million in coverage for nearly anything that might go wrong. This comprehensive protection encompasses three primary areas:
Unlike your homeowners and auto policies – which are designed to cover specific, defined events – an umbrella policy is built to protect you across a far wider range of circumstances. If you run out of coverage under a primary policy, your umbrella picks up where it left off. And because it covers situations that may have nothing to do with your home or your car, it fills in gaps that your other policies simply cannot reach.
Most auto and homeowners policies limit liability coverage to $500,000 or less. Umbrella coverage typically starts at $1 million, and higher amounts are available. That gap – between what your standard policies cover and what a serious lawsuit might cost – is exactly what the umbrella is designed to address.
Affordable Coverage
One of the most compelling arguments for umbrella liability insurance is the cost. A policy providing $1 million in protection typically costs under $250 per year. Few financial products offer comparable value for the money. When you consider that a single lawsuit can easily generate millions of dollars in liability – for medical bills, property damage and pain and suffering combined – paying a few hundred dollars a year for that level of protection is, by any measure, a smart decision.
The math is straightforward: the cost of an umbrella policy is small. The potential cost of not having one is not.