First off what is umbrella insurance? Many people are not familiar with this. By definition umbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by other policies.
Umbrella policies can be very risky and vary largely depending on the policy, your current coverage and your insurer. The risk involved can be great so this is always a case by case basis.
This is a secondary coverage to give you an additional layer of liability protection. If you file a claim and you max out your coverage or certain things are not covered your umbrella policy will kick in and you will not be out the value of your loss or damage.
A perfect example from Safeco Insurance is: “If the liability limits are exhausted on your auto insurance, your umbrella insurance would take over and provide you with additional protection of at least $1 million or up to the level of coverage purchased. If you have $500,000 liability coverage on your auto policy and $1 million umbrella coverage, your total auto liability coverage is increased to $1.5 million.
Umbrella insurance is not for everyone. You need to evaluate your risks and current coverage with an agent to see what is best for you.
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