If you want to keep the raindrops from falling on your head you will need an umbrella. If you want to protect against a deluge of financial disaster, you should consider an insurance umbrella. The insurance concept of an  ”umbrella” has been used loosely over the years. Some think it is some kind of comprehensive omnibus insurance document that covers just about everything. In truth, the umbrella is a policy that provides excess liability over other policies. For personal insurance matters, the umbrella gives extra liability over your home, autos, boats, vacation homes, and any other eligible assets. There are also umbrellas for businesses and corporations which tend to be much more expensive since the exposures can be significant. Personal umbrellas come in increments of 1,000,000. If you have a house and 2 cars, you can expect to pay about $300 for a 1,000,000 umbrella. The excess coverage provided by an umbrella will not kick in until the “underlying” (home, auto, etc.) policies pay out to their limit. There is a specified requirement of coverage necessary before the umbrella will respond. For homes and autos that requirement is usually 300,000. The umbrella will start responding once the 300,000 is expended. Umbrellas often provide some extra coverage not usually found in the underlying policies. For instance, most personal umbrellas will provide excess liability if you rent a vehicle overseas. The underlying auto policy does not provide this coverage. Not all umbrellas are the same so it is important to check with your insurance professional as to what is and what is not covered. All your relatives living in the household, whether you like them or not, are insureds and protected under this grand parasol of coverage.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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