Q. What is Umbrella Insurance and do I need it?
A. Liability Umbrella policies are incredibly valuable and affordable protection needed by individuals and business, alike. Your primary policies – home/car/boat/business owner’s/worker’s compensation/commercial automobile/etc. – provide an initial layer of liability protection. This primary coverage is often maxed out at $300,000 – $500,000 for individuals and $1,000,000 for businesses. Umbrellas can come with many different coverage limits, but the most common limits are $1 million, $2 million and $5 million. Insurance is designed not only protect your current assets, but it also aims to protect your future earning potential against wage garnishments and judgments that a major claim may give rise to. Umbrellas extend your liability protection beyond your primary coverage. Simply put, someone with $500,000 primary liability and a $1 million umbrella effectively has $1.5 million in protection (within the bounds the policies involved). Umbrellas can sometimes even provide additional coverage that your primary insurance does not.
Whether or not you buy an umbrella policy is up to you, but for guidance call your agent!