Get extra liability protection with umbrella insurance

Get extra liability protection with umbrella insurance

(BPT) – When a claim exceeds the limit of your home or auto liability insurance, a personal umbrella policy can help cover the rest and give you peace of mind.

Legal responsibility is a tricky thing. Whether you’re at fault for an auto accident, or someone is injured on your property, you can be held responsible for other people’s medical expenses, pain and suffering, property damage, and even lost wages. And here’s the thing: You don’t have to be a millionaire to get sued like one.

That’s why liability coverage is such a vital part of your homeowners or auto insurance policy.

The truth is, anyone can get hit with a costly lawsuit, regardless of age or income. And if you’re found liable for damages, it’s not only your savings that’s at risk. Your property, investments and even future wages could be on the line if damages exceed the amount covered by your homeowners or auto liability insurance.

What is umbrella insurance?

A personal umbrella policy (PUP) offers extra liability coverage beyond the limits of your homeowners, auto or renters insurance. After you reach the limits of other policies, umbrella insurance kicks in so you don’t have to pay for additional damages out of pocket.

Do you need an umbrella insurance policy?

‘Major liability can arise easier than you might think,’ says JJ Montanaro, Military Affairs Director and Certified Financial Planner professional.

‘Let’s say you crash into and total a $100,000 sports car driven by a heart surgeon who, … as a result, can’t go back to work,’ Montanaro says. ‘Or maybe there’s a pool accident at your house. Or your dog bites someone. It happens, and it can get very expensive – even exceeding what your auto or homeowners insurance would pay.’

Adding umbrella coverage can provide a higher level of protection for your assets and wages – as well as any loved ones in your household.

A good rule of thumb is to have enough liability protection to cover your net worth – everything that you own minus everything you owe. If your net worth exceeds your limits on your auto and home insurance, get an umbrella policy.

What does an umbrella policy cover?

Umbrella policies typically offer four general categories of coverage:

1) Bodily injury liability refers to the cost of injuries to other people.

2) Property damage liability refers to the cost of damage to another person’s property caused by you or a member of your household.

3) Other personal liability covers other types of claims beyond bodily injury and property damage. If you’re sued for slander, libel, pain and suffering, or lost wages, an umbrella policy can help cover damages and legal fees.

4) Landlord liability helps protect owners of rental units against liability. For example, an umbrella policy can help cover bodily injury or property damage that occurs on your rental property – or even by a tenant’s pet.

How much does umbrella insurance cost?

Believe it or not, umbrella insurance isn’t expensive. Typically, you can get $1 million of coverage for about $1 a day.

Keep in mind that some insurers will require you to purchase a certain amount of liability coverage on your underlying policies before they’ll sell you an umbrella policy. According to the Insurance Information Institute, the typical requirement is about $250,000 of auto liability coverage and $300,000 of liability insurance on your property policy.

Of course, the amount you pay will depend on your financial situation and the amount of coverage you need.

To learn more about the benefits of an umbrella insurance policy, visit


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