When purchasing an insurance policy for your home or business, you may be given the option to purchase an umbrella policy as well. But what is an umbrella policy? In short, an umbrella policy offers additional increased limits of liability for your existing insurance.
An umbrella policy does not give you additional coverages; it simply gives MORE of what you already have. For example, your homeowner’s policy might cover you for up to $500,000 in liability. However, if a guest has an accident at your home which results in a serious injury, their medical bills could be well over $500,000. Since you could be held liable for those bills, you would be forced to pay out of pocket for the remainder that exceeds the $500,000 limit of your policy. If you had an umbrella insurance policy, you would have coverage up to the limits you set on that policy instead which are usually significantly higher. Sometimes double.
Most umbrella policies are relatively inexpensive to purchase. An average $1M umbrella insurance policy costs as little as $380 a year. That small premium could save you in the event that a claim arises within your policy year. In fact, some mortgage lenders may require you to have increased limits of liability to maintain your loan with them. Some properties that have swimming pools, for example, are considered higher risk than a home without. Those homes may need to have increased limits for that reason alone.
For more information on umbrella insurance and how purchasing a policy for your home or business could be beneficial, call us. We can review your insurance and see if an umbrella policy is right for you. Having an insurance policy may not be enough. Adding an umbrella policy might be all you need for peace of mind.