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.

An Umbrella for Stormy Weather

umbrella policy

All of us have the potential of experiencing “stormy weather” when it comes to insurance claims. Even careful drivers could find themselves negligent in a car accident where bodily injury claims reach staggering amounts. Although severe accidents are rare, it is advisable to “load up’ on insurance coverage for our protection against liability claims from others you may injure. A good way to do this is to purchase what is referred to as an “umbrella” policy. Many think that the term “umbrella” is some mysterious all-encompassing insurance contract that will cover everything imaginable. The umbrella is merely a policy that provides excess liability insurance. It is additional insurance beyond what is provided by other policies you may have. For instance, if you have an auto policy that has $300,000 of liability limits and you purchase an umbrella for $1,000,000, your total protection is $1,300,000. The umbrella will provide excess liability over a variety of insurable interests such as auto, home and investment (non business) properties, and boats. The cost of an umbrella is surprisingly low. The premium for a $1,000,000 contract providing excess liability over two cars and a home is approximately $180 a year. Personal insurance umbrella limits are available up to $10,000,000 usually.

Umbrellas are frequently used in business insurance as well. Limits could exceed $100,000,000 for some industries where there is a possibility of catastrophic loss. Movie theatres and other businesses where a large number of people congregate in a confined space purchase high limits.

Umbrellas normally provide the same coverage found in the underlying policy and some provide expanded coverage such as automobile liability while driving in other countries.

Ask your insurance agent to design an umbrella program that is right for you.

For further information about the personal and commercial umbrella and other insurance matters contact Guy Hatfield at 203.256.5660.

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