Umbrella Coverage

You carry insurance on your home and automobiles to protect you from having to use your own funds to pay for damages resulting from an accident. But what happens when claims exceed your policy's limits?  Without additional liability protection, you may have to pay the difference out of your pocket. 

The average jury award in vehicular liability cases has risen by more than 80 percent since 1994 according to insure.com December 28, 2001.  You probably haven't increased your coverage by 80 percent during that time.  If your policy limit is $300,000 and you are ordered to pay a $1 million judgment, you could be forced to sell your home, take money from your retirement savings, or even use your future earnings to pay what you owe. 

A personal umbrella insurance policy is one way to help protect your assets from settlements that exceed the limits of your homeowners, auto, and rv policies. 

Umbrella insurance policies are commonly sold in increments of $1 million and are intended to provide an extra layer of protection over your other policies.  When you purchase an umbrella policy, the insurer will usually require you to raise the limits of your other policies to their maximums.  Those policies serve as the deductible for the umbrella policy. 

Juries typically don't take into account a defendant's ability to pay when deciding the amount of an award, so exposure to risk can affect people at all income levels.  When you review your insurance coverage, consider the added protection an umbrella liability policy can offer.

Copyright 1998 Insurance Concepts, Inc.