3 Reasons Why Your Need an Umbrella Policy

Do you have a $1 million umbrella policy? You are not sure what this policy is and why you need it?

If you own a couple houses, and rent some houses out or have a dog, a boat, or a Jet Ski, motorcycle or RV, you should have it. The more property you own, the more risk you are taking. Any parent or guardian of a teenage driver in the household should consider this coverage as a necessity. If you are a movie star, a politician or other public figure, your additional liability policy should be purchased with an insurance company that specializes in those kinds of policies.

An umbrella policy provides additional liability insurance over and above the basic coverage provided by underlying liability insurance, such as an auto policy. You also can purchase a standalone excess liability policy that does not require an underlying policy. Such a policy also covers some losses that are excluded by the auto or homeowner's liability insurance.

Here are three major reasons why you need an umbrella policy:

These days, anyone can be sued for almost anything. If you caused a five-car accident on the road because you were texting, you can be sued. If you had a party in your home and somebody tripped on that staircase that you had no time to fix, you can be sued. Liability policy provides coverage against lawsuits that you, your spouse, partner or kids, or even a pet caused bodily injury or property damage to other person by accident. False claims, false arrests, slander, libel, vandalism are also covered. In case of a lawsuit, if you are guilty, the court can order your personal savings and personal property to be taken away from you to pay for the losses. Even your future earnings can be subject to paying for that loss. I am sure you don't want that to happen. An umbrella policy covers the insured and his or her family anywhere in the world.

Personal umbrella policy range can be from $1 million to $5 million, but the premiums are not that high. The majority of a loss is paid by your primary auto insurance, so your umbrella insurance rates are not that expensive. This type of policy can cost between $110 to $300 per year, depending on how much property it covers, the state and country where the policy was purchased. Contact your agent and purchase an umbrella policy and be safe!