What Is Umbrella Liability?

 

Why do I need to pay for this coverage?  These are common questions agents receive from clients as you quote policies or do account reviews.   Instead of stumbling over the explanation, think of using this quick synopsis of Umbrella coverage when talking with your client:

 

‘As an individual, if you are ever sued your standard homeowners or auto policy will provide you with some liability coverage, paying for judgements against you and your attorney’s fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That is what a personal umbrella liability policy provides.

 

An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.

 

For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost around $75, and about $50 for every million after that; depending upon the number of assets insured.

 

Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $300,000 of liability insurance on your auto and homeowner policy before selling you an umbrella liability policy for $1 million of additional coverage.’

 

Recommending Umbrella coverage will help cover your insured for additional liability exposures they do not know about.  Help protect them in more than one way and write Umbrella coverage over all of their assets.