We’re believers in them. For example, a woman hit a boy with her car on a busy street, and it was a $2,000,000 claim.
Relatively speaking, it is an inexpensive policy – maybe $12 a month.
If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgements against you and your attorney's fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That's what a personal umbrella liability policy provides.
An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.
For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.
Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.”
Why do I need an umbrella policy? Basically you have your limits of liability on auto, limits of liability of home, if you are sued beyond those limits, your umbrella kicks in. We’ve paid out on six. At least $300K on home. Your dog bites someone. People with pools. Umbrella requires the highest limits.
90-95% of time the umbrella will be the same holder as your home or auto. We do have 2 outside companies that will provide umbrella beyond other policies. We recommend for people with rental properties, pools, teenage drivers.