A client from Appleton, WI recently asked me the question “What exactly does that $1M dollar umbrella policy do for us? So, I thought it would be a good question to blog about.
The quick answer is that an umbrella policy picks up where your other insurance policies like homeowners and personal auto insurance leave off. For example, say you have an auto insurance policy that has liability coverage of $250K per person and $500K per occurrence. If the unthinkable happens and you cause an accident with major injuries or worse, the resulting damages or possible lawsuit could exceed the $250K for an individual or even the $500K for the entire accident. If that were to happen, your umbrella policy would then cover the excess up to the limit of the umbrella (1 million dollars in my client’s case). An umbrella policy does not kick in until your other coverage is used up. However the coverage amount is in addition to your other policies. So for the example above, the total amount of coverage that could be used for this accident would be 1.5 million dollars – $500K per occurrence from the personal auto policy and an additional $1M for the umbrella.
As always if you have questions about your coverage, you should contact your agent. If you don’t have an agent, or would like to switch agents, you can contact us!
Disclaimer: This post is intended for informational purposes and does not constitute a recommendation for insurance coverage. Everyone’s insurance needs are different, and you should consult with your insurance agent to ensure that you have the coverage you need.