If you have a family, you know that protecting them is one of your top priorities, whether it is physically, financially, or emotionally. One main form of protection includes insurance. If you own a home or a car, you already have insurance. You also probably have life insurance. These policies are meant to protect you and your family. Beyond the typical auto, home, and life insurance you may have overlooked an important and affordable type of insurance: umbrella policy. 

What is an Umbrella Insurance Policy? 

Umbrella insurance is sometimes known as excess liability or personal liability insurance. It can be a personal or commercial policy that supplements other liability policies most people already have in place, such as auto, homeowners, or renters insurance. It’s designed to kick in when the liability coverage on those policies has been exhausted.

This type of policy is not a stand-alone policy, but rather extends the policies you already have. An umbrella policy is meant to protect you and your assets from the financial fallout of common risk scenarios such as car accidents, slips and falls, swimming pool accidents, and any event that could get you sued for damages to other people’s property or injuries.

How Does an Umbrella Policy Work? 

According to MoneyCrashers online, umbrella policies work a little differently than your typical auto or home insurance. Most types of insurance provide one specific kind of coverage. For instance, your auto insurance policy protects you in case of a car accident, while your homeowners policy covers your house, and belongings within, against theft or damage. By contrast, umbrella insurance is a single policy that covers most aspects of your financial life – just like an umbrella covers every part of your body in a rainstorm. So any time you run over the liability limits on one of your other insurance policies, your umbrella policy is there to take care of the extra costs.

For example, say you are involved in a car accident in which there were injuries to the other driver. Sure, your auto insurance will cover the medical expenses – but only up to a certain amount. Medical bills and/or a liability lawsuit could add up to the millions. Having an umbrella policy protects you and your family from being wiped out of all your assets. 

At Phil Richard Insurance, our umbrella policies come in coverage amounts of $1 million dollars or more. The extra protection is designed to kick in if you are sued over an incident not covered by your existing home or auto insurance. It is recommended that people buy $1 million more in umbrella insurance than they think they will need. The idea is you can’t be over-insured for lawsuits. Our team will guide you toward the level of umbrella insurance you may need. Call us at 978-774-4338 or contact us through our website with questions.