Do You Know umbrella insurance and how does it work?
Think of umbrella insurance (sometimes called personal liability umbrella insurance) as protection for your savings and other assets.
Umbrella insurance helps pay if someone makes a claim for damages that exceed the liability limits on your auto insurance, homeowner's insurance, or other insurance.
Umbrella policies start at $200 per year, with an average price of $380 for $1 million in coverage.
According to Trusted Choice, a network of independent insurance agents, umbrella insurance generally offers better value for money, due to higher coverage limits.
However, if you need to increase your liability coverage to meet the minimum required for umbrella insurance, you may pay more for a second insurance policy.
Almost all major insurance companies offer umbrella insurance. Most also require car, homeowner's, condo or renter's insurance.
Before purchasing umbrella insurance, you must generally purchase minimum liability coverage for that policy.
Adding umbrella coverage to an auto insurance policy may require $300,000 in bodily injury liability coverage and $100,000 in property damage liability coverage in the policy.
RLI and Auto-Owners Insurance are two companies that offer single umbrella insurance policies.
Any company can insure your home as long as you have at least $300,000 in liability insurance. However, if you don't have a car, farmers must insure your home.