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Originally Posted by jrc
Umbrella policies protect you beyond all your other policies. Which means if you're liable in an auto accident and your auto policy is insufficient to cover the liability, the umbrella will pick up the difference up to the limits of the policy. They also cover you if your liable for something that falls outside your existing policies. I can't think of a good example. They're relatively cheap because most of your typical liabilities fall in your existing coverage.
If you don't have sufficient existing policies, you usually can't get an umbrella plan, or it will be very pricey. If you don't have significant assets, most insurance companies will not sell you an umbrella. They don't want to pay out a claim for 2 million to protect your assets, when your total assets are worth $2000.
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I too have an umbrella policy. I also have extremely high limits on my primary (underlying) insurance. I have concerns about liability issues at my house, in and about my vehicles, and in and about my boat. I also have liability issues whereas I play golf (if you've seen me play, you'll know why
). I also am involved in volunteer activities, and that can have very real consequences as well.
I used to be in Personal Lines Underwriting for an insurance company and could not believe the number of people who did not want to protect themselves for liability, but would go to the nth degree for property. Society was litigious then, and after 10 years of being out of insurance, I know from the outside it is considerably worse.
As a side note, when I changed from a 112 hp Evinrude
to my 135 Merc Optimax
, that 23 HP change required me to go from $300K homeowners liability to $500k, or I would have lost my Umbrella coverage. That is probably why the underlying insurance on Mr. Littlefield's boat was so high, due to the liability exposure of the boat. Before the umbrella policy would kick in, the homeowners would pay the first $5 million.
If nothing else folks, take a look at your own exposures for liability, and talk to your agent. (When you get to know them, they are a cut above the used car salesman. Really!!!!!
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