Question I’m satisfied with the insurance coverage we have on our family home and vehicles. But I understand that an umbrella insurance policy can provide extra protection for our assets. How exactly does an umbrella policy do this?
We asked Joel Brekken, a Farmers Insurance agent in Duluth, Minnesota, to tackle this one. He knows all the ins and outs of how an umbrella policy can help you protect your assets.
Answer Think of umbrella insurance as an extra layer of liability coverage on top of your existing home and auto insurance — a personal umbrella over you and your assets. It’s additional coverage over your existing insurance limits, and it can be an affordable way to help you protect your home, cars, boats and other possessions if you’re sued. Coverage is available in $1 million increments up to $10 million, depending on your state of residence.
Remember that liability coverage helps you cover your financial responsibility to others if you’re found legally liable for an injury or property damage. For example, if you’re at fault in a car accident, the liability part of your auto insurance can help pay for repairs to the other driver’s vehicle. Liability coverage in your home policy covers accidents on your property, like a visitor slipping on a loose porch step or a tree in your yard falling on your neighbor’s roof.
The greater the value of the things you own, the more you have at risk. The liability limits on your auto and home policies may not be enough to cover everything you want to protect if you are sued. If the costs of paying for damage you cause exceed the limit on your home or auto policy, your personal umbrella provides additional coverage, starting at $1 million and rising to the limit you select.
You can set up your umbrella policy to provide liability coverage on possessions other than your home and cars, including watercrafts, ATVs, rental properties and vacation homes.
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