What is an umbrella insurance policy? How should it be a part of my financial plan?
Umbrella insurance policies provide another layer of liability insurance to your home or auto insurance policies to help protect you and your assets. The minimum additional coverage for umbrella insurance policies is 1 million dollars and they can go up from there depending on your needs.
Do I need an umbrella insurance policy in addition to my home and auto insurance policies?
As you build your net worth, it’s important to ask yourself this question. As an insurance expert, I recommend considering your net worth, assets, and home and auto insurance coverages limits. Are the limits on your auto and home insurance policies adequate to cover you in the event of a catastrophic accident where someone comes to you seeking compensation?
We have had clients that will work with us and their financial advisors to determine if the coverage they carry is adequate in the event of a catastrophic accident.
Most umbrella insurance policies only provide additional liability coverage. Some insurance carriers do offer, for an additional premium, the ability to cover additional uninsured/underinsured motorist coverage. This is the insurance coverage that protects you if someone else is responsible for injury to you from an uninsured or underinsured motorist. If you also want this coverage, you need to be sure your carrier offers this. We do have other sources that can provide this.
If you do have an umbrella policy, be sure the underlying liability limits for each liability insurance policy meet the minimum requirements of your umbrella policy. In my experience working with insurance claims, I have seen times when the underlying insurance policy did not have the appropriate underlying limits. This presents a gap where the insured may be responsible for the amount of damages until the gap for damages has been met. Conversations with your insurance agent regarding this should eliminate the possibility of this scenario.
Alliance Insurance of the Rockies Is Here To Help You With Your Insurance Needs
At Alliance Insurance of the Rockies, we are happy to discuss further with you umbrella policies and what they cover should you have any questions. Please call us today to learn more about umbrella insurance policies.