Umbrella insurance gives you an additional layer of liability coverage above your homeowner’s, renter’s, auto, and other policies. Your car, house, investments, and retirement accounts, as well as your normal checking and savings accounts and even future income, are all considered assets. It is important to know that if you are sued for a lot of money and do not have enough liability insurance or an umbrella policy to cover those costs, all of your assets are exposed.
The Benefit of an Umbrella Policy: Peace of Mind
A typical auto policy protects you for up to a maximum of $500,000 in liability coverage. Keep in mind, if you or one of your family members causes damage, injury, or death to another party, the costs could run into the millions. If you are sued, the umbrella policy covers the settlement, plus attorneys’ and court fees. So the umbrella policy prevents the possibility of financial ruin due to a misstep or unforeseen accident. Coverage typically starts in the range of $150-$200 for a $1 million policy – a fair price in exchange for the peace of mind that your home, bank accounts, or future income won’t be in jeopardy over an unfortunate incident.