Peace of Mind

What Type of Lawsuit Does Umbrella Liability Protect Against? - A 17-year old drives four friends home from a dance.  He swerves to avoid an oncoming car and hits a telephone pole, injuring three passengers and killing the fourth.  His parents, whose car he was driving, are sued for more than $500,000. Without Umbrella Liability Coverage, his parents would be personally responsible for paying out any awarded damages above and beyond what their standard auto policy covers. This could be hundreds of thousands of dollars, even more, potentially leaving them bankrupt.

What does Umbrella Liability cover and what does it cost?  To protect your assets and future earnings against a potential disaster like this, you need an umbrella liability insurance policy.  Most standard automobile policies cover up to $300,000 of bodily injury and $100,000 of property damage.  An Umbrella Liability policy, for $150 to $200 a year, typically extends over your homeowners and automobile coverages to protect you against lawsuits for up to $1 million. An Umbrella Liability policy will pay legal costs, too.

Who should have Umbrella Liability coverage?  People generally buy Umbrella Liability to protect their personal assets.  Consider your exposure to potential lawsuits.  If teenagers drive your cars, if you own recreational vehicles, if your pets could be considered dangerous, if you live in a community that has a high rate of lawsuits, if you are perceived by others as being wealthy, or if you entertain frequently and in large numbers, then you would benefit from having an Umbrella Liability policy.

Is Umbrella Liability coverage purchased separately from other policies?  You should consider auto, home and umbrella policies as one package and shop for all three at once, but you can also add Umbrella Liability coverage onto existing policies.