Umbrella Coverage Explained

One of the most certain things in life is, certainly, uncertainty. Your dog could bite the neighbor’s child. Your teen drive could hit someone on a bicycle. A guest could fall down your stairs. New England weather could cause a multi-car accident. You could be held liable to others for the cost of damages-injuries, property destruction, emotional distress, lost wages and more.

It’s a good thing you have insurance. But does your policy cover $300,000 of liability and, in the event of a lawsuit, you’re judged liable for $1 million. That leaves $700,000 left to pay. How are you going to afford to pay for it?

If you have umbrella insurance and your policy covers the incident, the additional $700,000 comes from your policy. If not, you run the risk of the payment coming from the assets you have now, your home, savings and future assets such as your salary.

Here are a few things you should know about umbrella insurance

Personal umbrella policies typically offer 1,2,3,4, or 5 million of liability coverage. Consider your net worth when choosing coverage—you could be sued for everything you have.
An umbrella policy is not a stand-alone policy. Your insurance carrier typically requires you to meet certain qualifications, such as having an auto policy with a certain level of liability coverage, in order to purchase umbrella insurance. (Doyle Insurance can help you understand your requirements.)
Even if you have umbrella insurance, your car or home insurance is your first line of defense. For example, if you are liable for $2 million in a car accident and your auto insurance covers $500,000 of liability, your auto policy covers the first $500,000. Your umbrella policy covers the remaining $1.5 million, assuming your policy covers the incident and that you purchased that much coverage. If you are liable for $250,000 in an accident on your property and your homeowners insurance covers $300,000, your umbrella policy won’t be needed.
If you insure a motorcycle, ATV, golf cart, snowmobile, motor home or boat, your umbrella policy may provide additional liability coverage on top of those policies as well. Be sure to check with a Doyle Insurance broker to confirm your coverage on these types of vehicles.
A single umbrella policy typically covers all of your family members who are residents of your household.

If you are curious about how umbrella insurance works, please contact our office today. Any one of our professional brokers can assist you.

Look forward to hearing from you,

Sean Doyle