What is Personal Umbrella Insurance?
If you’re in an auto accident or someone is injured on your property, your auto insurance or homeowners insurance will cover your liability. However, liability claims can exceed tens of thousands of dollars depending on the damage. Your auto or homeowners policy may not cover the full amount of damages.
That’s why you need personal umbrella insurance. It kicks in when your auto and homeowners insurance policy limit are met. With it, you can cover your liability costs and protect your home, personal or retirement savings, college fund, future earnings and other assets. Your current lifestyle remains secure thanks to the added protection of your personal umbrella insurance policy.
Additional Benefits of Personal Umbrella Insurance
In addition to covering any liability after an accident, your personal umbrella insurance policy covers several other incidents. Consider these additional benefits as you decide if this extra coverage is a wise investment for you.
- Personal injury coverage if someone files a libel, defamation of character, slander or related claim against you
- Worldwide coverage if you cause an accident while traveling abroad
- Vacation rental liability for rental equipment like scooters, boats, jet skis or other rentals
- Defense coverage associated with attorney fees and related legal costs
Maybe you think that personal umbrella insurance is only for the wealthy. Actually, it’s recommended coverage for anyone. You may not own $1 million in assets, but a single lawsuit can be expensive. Use your personal umbrella to pay the claim and associated legal fees as you protect your assets and lifestyle.
How Much Personal Umbrella Insurance Should You Buy?
Personal umbrella insurance policies are usually available in million-dollar increments. Take stock of your assets, and then select a policy of $1 to $5 million. In general, you’ll want a $1 million policy if you earn more than $100,000 annually and up $3 to $5 million if you own rental property.
How Much Does Personal Umbrella Insurance Cost?
Your risk affects the cost of your personal umbrella insurance policy. On average, expect to pay $200 per year for a $1 million policy or $300 per year for a $2 million policy if you own a home and two cars.
A personal umbrella insurance gives you peace of mind as it protects your assets. For assistance choosing the right personal umbrella insurance policy for your needs, talk to your insurance agent.