The first thing that may come to mind when you hear umbrella may not be insurance, but it should be. Like an umbrella covers you from the unfriendly weather outside an umbrella policy covers you from unfriendly mishaps that may happen in your life. It is liability coverage that can make sure you are safe from having your assets and even future income taken away from you.
Basically it is called umbrella insurance because it protects your insured assets more broadly than primary coverage. For example, in the fall you are driving down the road and a deer comes right in front of your car out of no where and you veer to miss it and hit an on coming car instead. The person driving the car is severely injured and is suing you for pain and suffering and medical coverage. Primary coverage may not always cover you completely in a case like this that could escalate up to $1 million. Primary coverage may cover about $300,000 which would leave you short, but with a $1 million umbrella policy you would be able to cover that additional cost up to $1,300,000.
Umbrella policies are also important for small businesses as well. Many small businesses seem to have a high risk of personal injury law suits with having large groups of guests at their business and they too need the extra protection for their assets and future business earnings. An example for a business may be if a customer comes into their pet shop and a dog severely bites them in the cheek causing them to need reconstructive surgery of their face. The customer decides to sue your business for the medical costs and wins the case granting the customer $1.5 million. Having an umbrella policy would also help you be able to cover this cost without it severely affecting your current assets and overall business earnings.
With higher limits than primary coverage, broader coverage overall, and defense coverage to cover legal costs if you are sued, you may now be asking yourself, am I eligible for this type of coverage and can I afford it? You are eligible if you have insurance on your home, car, business, motorcycle, rental dwelling, rental space, recreation vehicles, or boat that you own. Many times the cost of umbrella insurance can be between $200 and $500 per year for the additional protection for your assets and earnings. So stay protected and next time you find yourself in a rainy situation take coverage under your umbrella policy!
-Kimmarie