Personal Umbrella Insurance

Your Auto, Home, Boat and other policies with your primary insurance carriers have maximum limits or limits, that you decided to purchase; however, in case of a claim, you might be liable for greater amounts than your primary insurance policies’ limits. That’s where Umbrella insurance kicks in. It will extend the coverage above your limits of liability on your primary policy. Usually Umbrella policies are sold in increments of $1 million dollar.

Here is a common example of Umbrella policy in action. You have an Auto insurance policy with Bodily Injury Liability limit per person at $250,000 and you have a $1 million Umbrella. You were involved in an accident with another driver, who was severely injured. Bodily Injury claim ended up being $800,000. In this case your Auto insurance policy will pay $250,000 since this is the limit of Auto insurance liability you purchase and Umbrella will cover the rest of the claim within the limit of Umbrella. So, Umbrella will pay $550,000 since it’s within its limit of $1 million dollars. If you didn’t have an Umbrella policy, you’d personally be responsible for $550,000 and your personal assets might be at risk.