How much umbrella insurance do you need?

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The umbrella insurance, also called excess personal liability insurance, is above the cover of your car, homeowner and personal watercraft liability. If you hurt someone in a car accident or if someone slips and falls on your property, your car or home insurer will pay the damages up to the limit of liability for your coverage. If the damage exceeds these limits, the injured party may sue you for the difference. An umbrella policy will pay a judgment or settlement if you are held liable, and will pay for your defense, even if you are not liable.

Umbrella insurance is generally sold for $ 1 million. It costs around $ 150 a year for every million dollars covered up to $ 5 million. Most insurers will only sell you a master policy if you purchase a homeowner's or auto insurance policy and are covered by a minimum liability amount, usually $ 300,000 for homeowners' insurance. and, for automobile insurance, $ 250,000 for bodily injury to a person and $ 500,000. accident, says the Insurance Information Institute.

Evaluate your risks. According to Spencer Houldin, president of Ericson Insurance Advisors, in Washington Depot, Connecticut, in Washington State, a car accident is the most likely scenario in which a loss would result in additional coverage of the property. liability, because a permanent disability or death could easily be the subject of a great judgment. the more you drive, the more you make sure your teenagers or older drivers.

If you own a condo, you could be held liable for damage to other units or even to the entire building if a fire or supply problem in water was declared in your unit. You may also be at a higher risk if you employ servants or if you have a pool, trampoline, dog, boat, RV or snowmobile. You are more vulnerable to lawsuits if you are active on social media or if you are part of the board of directors of your homeowners association, condominiums or a non-profit organization. If you only tick one of the risk factors listed above, you may need additional coverage, says Chubb Insurance. If you have selected more than one, your risk of liability is above average.

Consider adding an endorsement to an umbrella insurance policy for excess coverage of uninsured / underinsured motorists, which covers you not only as a driver but also as a passenger, cyclist or pedestrian if you are hit and that the responsible driver does not have sufficient insurance. It costs $ 100 to $ 200 per policy.

If you volunteer on a non-profit board of directors, your homeowner and homeowner policies usually cover you for bodily injury and property damage – but probably not for all potential lawsuits, says Houldin. An endorsement for your multi-hedged policy for director and executive coverage usually costs less than $ 1,000 a year for coverage of $ 1-2 million.

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