You’ve probably heard of umbrella insurance — but with all the different insurance policies you already carry, it can be difficult to decipher if you really need more coverage. Is umbrella insurance something you should consider for yourself, your family, or even your business? We’re rounding up the pros and cons of umbrella insurance, so you can make the right decision for you.
Who needs umbrella insurance?
Umbrella insurance can benefit different policy holders — and that’s definitely a pro. While your auto insurance or health insurance is focused on those specifics, umbrella policies cover a range of situations where your standard policies leave off.
If you’re a driver, homeowner, renter, pet owner, parent, or business owner (to name a few), it’s likely that you would benefit from the additional coverage of an umbrella insurance policy. While there are many scenarios that might require the protection of umbrella insurance, you can consider yourself a good candidate if you have a number of assets to protect or a high chance of being sued.
Does umbrella insurance cover everything?
Speaking of coverage, what exactly does umbrella insurance cover? It can be pretty robust. Typical coverage scenarios can include:
- Asset protection. Coverage that goes above and beyond your basic policy.
- Lawsuit coverage. Coverage that will help pay for legal fees that aren’t covered by another policy.
- Additional coverage above coverage limits. Extra protection beyond your auto and personal liabilities policies.
Often, these scenarios are not covered under normal liability insurance — that’s why it’s great to have the additional protection that umbrella insurance offers.
However, it’s important to note that umbrella insurance has its limitations. It won’t cover personal injury or property damage, and it may not cover certain types of watercraft without an existing boat insurance policy.
There’s also an important distinction between personal umbrella insurance and commercial umbrella insurance: a personal policy won’t cover business claims and vice versa. Be sure you’re choosing the correct policy for your unique situation.
Is an umbrella insurance policy worth it?
If additional coverage seems to benefit your insurance needs, your next consideration will be cost. Con: umbrella insurance is additional money on top of your current expenses. There’s the typical monthly premium — and beyond that, you may need to increase your coverage on your other insurance policies to meet the minimum limits required by umbrella insurance.
On the flip side, umbrella insurance is attractive because it’s generally more cost-effective than increasing your liability coverage. You can expect a typical umbrella policy with $1 million in coverage costs to range from $150 to $300 per year in premiums. You can also chat with your insurance agent to take advantage of bundling your policies for a discount.
Another positive? You won’t have to pay a separate deductible for your umbrella insurance.
Cut to the chase: should I get umbrella insurance?
The decision to take out an umbrella insurance policy is a personal one. Once you’ve factored in the value of your assets and your risk of pricey insurance claims with the cost of an umbrella policy, you might find the additional coverage and peace of mind worth the trade-off! If you’re still unsure about your coverage needs, we’re happy to help walk you through the ins and outs.
Lindow Insurance is here to help.
We know there’s a lot to consider when deciding on the right amount of insurance coverage, but you don’t have to go it alone! Our agents will get to know your specific needs to find the coverage that works best for you. If you’re interested in learning more about how umbrella insurance can work for you, get started today with a free quote.