Umbrella Policy: What does it cover? | Hitchings Insurance Agency

umbrella-policy

Umbrella Policy: What does it cover? | Hitchings Insurance Agency

yellow umbrella

We have all seen an umbrella. Most have probably used an umbrella. What does it do and when do we use it? (This isn’t a trick question.) If you said, it protects me from getting wet when it is raining outside, pat yourself on the back! You are correct!

No, this is not to review the umbrellas that keep us dry when it is raining. Instead, we are going to review what an umbrella policy is and why it is important to consider. [By the end, you should know why it is called an umbrella policy.] It falls under the broader topic of liability, so let’s start there.

Liability Basics

Simply put, liability is when bad things happen to other people because of you. If you drive a vehicle and you cause an accident, you may be liable for things such as medical bills and court costs. You even have liability with your home! Do you have a dog? Do you have guests over to your house? If the dog bites someone or a guest gets injured on the property, you are liable.

Your auto policy and homeowner’s policy cover liability. However, it also has a limit, which is the maximum that will be paid. An umbrella policy helps to cover liability beyond the limits of your other policies. Essentially, it will protect you from the worst case scenario, such as a loss of life or permanent disablement.

Let’s take an example to illustrate an umbrella policy.

Mary was involved in an automobile accident, which left her with a hefty bill of $750,000. Her auto policy has a liability limit of $500,000, which leaves $250,000 that still needs to be paid. Without an umbrella policy, this would be her responsibility! (WOW!) Thankfully, Mary had an umbrella policy that covers her for an additional $1,000,000. (Whew!) So, the remaining $250,000 is covered and will not leave Mary paying someone for the rest of her life!

Why you should consider an umbrella policy

Accidents happen, but so do lawsuits! There is a chance that your auto or homeowner’s coverage won’t provide enough to adequately protect your assets in these situations. In the previous example, without the active umbrella policy, there would not have been enough liability coverage on the automobile policy alone.

We recommend a personal umbrella policy to all clients for the following reasons:

  • Protection of personal assets
  • Inexpensive
  • Peace of mind

An umbrella policy will give you an extra layer of coverage that protects your assets against a liability lawsuit involving your auto, home, recreational vehicle or rental property. Just like an umbrella protects you from the rain, an umbrella policy protects you from the storm clouds of life. We want to make sure the assets you have worked so hard for are not jeopardized.

Life gets busy, we know! We just don’t want you to say, “I wish I would have.” It would be better to hear, “I’m glad I did!” Click on the image below to get the process started for an umbrella insurance quote. It only takes a minute.

rain on umbrella

About the Author

Kari
I'm a small town girl that loves family, agriculture, fitness, cooking and helping others. It is a pleasure to be a farmer's wife with the blessings of 3 independent, ornery but loving children. I enjoy running 1/2 marathons with a goal of completing one in every state with my "half sisters." Although exhausting, it's my way of seeing the country. I love my position as marketing manager at Hitchings Insurance Agency...party planner, social media guru, community service leader, blogger/vlogger, video producer! So much fun to be had each and every day. Join in the fun on Facebook, Instagram, Twitter and Google +. See you there!