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Financial Resource Center

Umbrella Insurance Policies

If you own a car or a home, you already pay annual premiums for specific amounts of insurance protection for these important assets. Your auto and homeowner's policies may also include additional liability coverage for damages to the property of others and to cover you for injuries to yourself and others. But is this enough, especially when it comes to liability coverage?

The liability coverage in your current auto or homeowner’s insurance policies may not be sufficient if there is ever a very large claim against you. This additional protection can be found with an umbrella insurance policy.

Umbrella insurance policies are a special kind of "override" to your other insurance coverage. The word "umbrella" is used because of the special overall protection an umbrella gives you when it is raining.  Usually offered at $1, $3, and $5 million or greater face value, these policies protect your assets and your future earnings if an unusually catastrophic event happens.

In these times, increased litigation and the high costs of advanced medical techniques make an umbrella policy an important consideration in the protection of your financial future. Nearly everyone has heard of or read about someone losing his or her home or life’s savings due to the ramifications of an accident. Furthermore, as your net worth grows, so does your exposure to larger and larger claims against your finances, both net worth and future earning power.

The good news is that additional liability coverage is available, and the costs are relatively low. An umbrella policy may only cost about $125 annually for $1 million policy and less than $500 for $5 million protection. To get the best deal, be sure to explore policy options from the same company that carries your other auto and home protections. As always, be sure to work with a trusted insurance professional to review your needs, risks, and exposure to determine what is best for your specific situation.

 

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