083: Umbrella excess liability coverage

Let’s switch gears a talk about additional liability coverage that many of us should have, but don’t.

When we reviewed homeowners, renters and auto policy: all of these coverages provide personal liability protection in case there is a bad accident and you are held liable.

For some of us more coverage is needed because we have more assets to protect or we earn significant income. That’s where Umbrella excess liability comes in.

It provides protection in excess of what your primary policies covers and extends coverage in case of catastrophic losses.

For example if you have an auto policy with $500,000 liability limit and you need to get additional coverage to protect your net worth, you will go for the $1,000,000 umbrella policy, since that is how these policies are sold. And now your overall coverage will be $1,500,0000.

Interesting fact: Umbrella policies began to be sold in 1949 and most accidents which use Umbrella are automobile related.

$1,000,000 cost on average about $150 per year.

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