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Should I purchase an umbrella liability policy?
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's 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 about $75, and
$50 for every million after that.
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 $250,000 of liability insurance on your auto policy
and $300,000 of liability insurance on your homeowners policy before
selling you an umbrella liability policy for $1 million of additional
coverage.
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