Reader question:
What’s an umbrella liability policy, and should I get one?
Arnold
Great question, Arnold.
Basically, what an umbrella policy is, is something that extends your policy coverage. That away, when the liability on your home and auto insurance run out, the umbrella kicks in and pays claims up to a selected limit. This is a great thing to have in case you are ever sued. If you are sued, you’ll get standard liability coverage from your home and auto insurance companies, helping you pay for judgments and lawyer fees. Adding umbrella liability just gives you that extra bit of protection that can come in handy when the going gets tough.
Umbrella policies, besides extending your coverage, will also keep you covered for things like libel and slander. You can add $1 million worth of umbrella insurance for as low as $150 per year, and each million you add after that costs even less.
Since the umbrella liability only takes effect once you’ve used up all of your other insurance, most companies require you to have a certain amount of coverage before you can take it as an option, like $250,000 on your aut insurance.
Cheers,
Fashun Guadarrama.