Most insurance policies include two primary components of coverage: property and casualty (liability). Many believe that the most important aspect is property as it provides coverage for things like cars, boat, home, motorcycle, etc. The property policy will protect these items against covered perils like wind, fire, theft, etc. In my opinion, the most important aspect to any policy is the liability component. How will your insurance portfolio protect you against accidents causing property damage or bodily injury? Do you have enough?
An umbrella insurance policy as its name states extends your liability protection over all underlying risks. Your underlying policies include a limit of liability protection, but if those limits are exhausted the balance of the settlement would come out of your own pocket. An umbrella can be purchased in increments of one million dollars and the cost of such a policy is lower than you might think. Most $1,000,000 umbrella policies extending over two vehicles, two drivers and one property is about $250 annually. You will have peace of mind with this important, relatively low-cost policy.
We never anticipate the need for such a policy, but your family’s financial future may very well depend on it.