For example, your home insurance policy can help cover the cost if someone becomes injured at your home accidentally. Slip and fall accidents are among the most common examples of this type of claim. It isn’t unusual for this type of claim to involve both medical bills as well as lost wages, which means the cost can add up quickly.
Your auto insurance policy also carries liability protection. Bodily injury liability coverage helps to pay for the injuries to others in an automobile accident. Again, lost wages may be a factor in the claim amount. Property damage liability coverage helps pay for damage to the property of others, which often is other vehicles but which can also be other items like buildings or sign posts.
Between your home and auto insurance policies, most of your liability risks should be covered. However, certain types of liability aren’t covered by either of these policies and there’s also the question of how much coverage you have.
For example, in the US a common liability limit for a home insurance policy is $300,000. Imagine a situation where a jury awards someone $1 mill for injuries that happened at your home. The other $700,000 doesn’t simply go away because you only have $300,000 in coverage. Instead, you may be forced to sell your assets and your future earnings may also be at risk.
It isn’t difficult to imagine a similar situation due to an auto accident. After all, we don’t have much control over how severe an accident is or what type of injuries anyone will suffer. A quick run to the store could change your life and the lives of others forever.
An umbrella policy can extend the liability limits of your home insurance and auto insurance policies, bringing your total coverage limit to $1 million or even more. In addition, you’ll also get some new coverage benefits. Personal injury liability, such as slander or libel, can be covered by an umbrella policy but are not covered by your home insurance policy.
With an umbrella policy you’ll not only get higher coverage limits but you’ll also get more protections then with your home or auto insurance policy. Because the umbrella policy is extra coverage, the cost per dollar of coverage is often much lower than with your home or auto insurance policy. In effect, your umbrella policy becomes inexpensive coverage to supplement your existing insurance.
If you don’t yet have an umbrella policy, just reach out to your broker to discuss your coverage needs. You might be surprised at how affordable an umbrella policy can be and how well an umbrella policy can protect your family.