If you have home insurance, or are shopping for it, you may have heard about an umbrella policy. What is an umbrella policy, and why would you need one?
When you buy a home owners insurance policy, you typically get coverage for the dwelling (your home), outlying structures (such as sheds), personal possessions and liability. You also get some coverage for living expenses in case your home is uninhabitable after a claim. All of these coverages have limits on the amount the home insurance company will pay in the event of a loss.
Umbrella, or personal liability umbrella policies, provide additional liability coverage above the limits in your standard homeowner policy. Why do people get this extra protection? Basically for peace of mind in a society where personal lawsuits are filed over the slightest thing. A personal liability umbrella policy can help protect your home, car and other assets in the event you are sued.
They usually provide coverage for bodily injury and property damage liability, and may also cover such liabilities arising from defamation, eviction and more.
In the event of a claim, an umbrella policy’s coverage kicks in after your liability limits have been reached on your car and home insurance policies. Umbrella policies do cost a bit, so you might want to see if it’s cheaper to raise your limits on your homeowner and car insurance policies. Talk to your agent, or shop around for quotes.
If you’re shopping for home insurance quotes, get at least three different quotes for comparison as rates vary from company to company. Also, ask if they have a personal umbrella policy and get a quote for that extra coverage. One of the easiest ways to do this is to go online to an insurance comparison Web site that will offer several quotes from one site.