Do I Need Umbrella Insurance?
If you’re even thinking about Umbrella insurance, chances are you might need it.
Ok, so obviously that’s not true across the board. But generally, if you’re worried that even the highest liability limits of your auto, home, or watercraft insurance wouldn’t be enough to pay for a large liability award, then extra Umbrella coverage might make you feel more protected.
That’s because Umbrella insurance extends the limits of your underlying liability coverage, and it can do it for a pretty small cost (usually somewhere around $250-$600 a year*).
But how do you know for sure that you need Umbrella insurance?
That’s a reasonable question. But to answer it, let’s turn the tables for a second, and ask you a couple of questions first:
- Are you a high net worth individual? You may need to do a little math here. Remember that Net Worth = What You Own – What You Owe. If you do have a high net worth (say, around one million dollars or more), you may want to protect it against a big liability judgment with an Umbrella policy.
- How exposed to risk are you? We’re not asking if you’re a secret agent, professional skateboarder, or stunt person. But if your day-to-day life exposes you to more than normal risk, it might be a good idea to extend your coverage. Do you spend a lot of time on the road? Do you host dinners and parties in your house? Do you have a pool? Do you have a vacation home?
If you answered yes to any of these questions, and you have a large income and assets you want to protect, you should consider an Umbrella policy to help you protect what you’ve spent a lifetime building.
*Cost of Umbrella insurance varies by policy and state.
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