Umbrella insurance works like an umbrella when your current insurance policy can’t keep the rain out.
While it’s easy to assume that only the wealthy would need that much insurance coverage, you’d be surprised at how important an umbrella policy can be for an average member of the middle class. For example, if you have a car insurance policy with liability coverage and get into an accident, a lawsuit may easily exceed your liability coverage and it’s going to be left up to you to pay anything that is above your coverage.
An umbrella policy provides an additional layer of insurance, typically $1 million or $2 million above your auto and home insurance coverages. This may seem like overkill but imagine your pool or trampoline seriously injuring someone and the victim slaps a big fat lawsuit in your face. Depending on the damages, it could easily exceed the amount of health or auto insurance liability coverage and go into the 6-figure range.
Insurance companies require specific levels of liability insurance on your auto and home insurance policies before they approve an umbrella policy for you. These levels are typically:
- $300,000 per occurrence for personal liability, bodily injury, and property damage liability on your homeowners insurance policy.
- $250,000 per person for bodily injury and $500,000 per accident on your car insurance policy.
- $100,000 per accident for property damage on your car insurance policy.
Umbrella insurance has your back and will protect you against bad days when your other insurance policies fail to provide the necessary coverage. Contact Pierce Insurance Group in McKinney, Texas to get guidance to the right policy!