A Personal Umbrella Policy provides a valuable extra layer of protection for you and your family against large liability claims. Such a policy typically covers home and auto, but can extend to boats, recreational vehicles, rental homes, etc. For example, if you are found to be at fault in a vehicle accident involving three other vehicles and there are injuries, there is a good chance that your standard policy’s auto liability limits would not be enough to cover the accident. “Without an Umbrella Policy’s extra protection, you would be responsible for the difference,” said Kaitlynn Tatum of Fogle Insurance Group. While a Personal Umbrella Policy can be good for anyone, those with a high net worth or considerable assets have the most to protect, so they would benefit most from such a policy. Also, if you have multiple personal policies with liability coverage, you should strongly consider the protective reach of an Umbrella Policy. “And here’s something you may not have considered,” Tatum added. “If you enjoy hosting parties where alcohol is served, most Umbrella Policies will cover any liability if one of your guests is involved in an accident while intoxicated after leaving your party.”

How does it work?

When you get an Umbrella Policy, you will provide all of your personal policies to your agent to be included as underlying policies. “Exclusions will differ between insurance carriers, but the general rule of thumb is if it is covered on the underlying policy, it will be covered on the Umbrella once the liability limits on the underlying policy have been exhausted,” Tatum explained. “Most Umbrella policies will even pay for your defense if you are sued for a covered loss.” Uninsured/Underinsured Motorist Coverage also is a valuable addition to an Umbrella Policy, and most insurance companies give you the option to purchase this extra coverage. While a standard Umbrella Policy provides liability coverage to reimburse the other party in an accident, UM/UIM coverage protects you if you are not at fault but the other driver is uninsured or underinsured. “For example, if an uninsured motorist causes an accident that results in your death, the cost of your medical bills will go against your estate,” Tatum explained. “This cost can be applied to your Umbrella Policy if UM/UIM coverage has been purchased, which is a great benefit to your surviving family.” A standard $1 million Umbrella Policy covering one home and two vehicles typically costs about $12 a month. “That’s a very small price to pay for a wealth of protection,” Tatum said.

“Denver Citizen – 2020-02-21.” The Denver Citizen – Lake Norman Media Group, 21 Feb. 2020, denver.lakenormanpublications.com/pageview/viewer/2020-02-21#page=24.

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