You may have heard of umbrella insurance before, but never really thought you could benefit from it as an individual homeowner. Learning how umbrella insurance works may help you decide whether or not you should invest in an umbrella insurance policy of your own. 
Umbrella insurance is basically an extension of the liability insurance you already have. It increases the limits of coverage exponentially for a minimal cost in premium. In some cases, you may be required by your mortgage lender to have increased limits for your home. For example, if your home has a swimming pool the accident risk is increased. Your regular homeowner’s insurance policy may not be enough to pay for a liability claim if a guest is injured in or around your pool. Your mortgage lender wants to know that you will be able to pay for damages without missing a mortgage payment. Therefore, having an umbrella insurance policy in place can help pay for the claims above the limits of your homeowners policy.
Umbrella insurance can also offer additional coverage on your auto insurance as well. If you are in an accident and a third party is injured, your umbrella policy will step in once the auto policy’s limits are exhausted. Unfortunately, some auto accidents can result in significant bills for damage and injury. Umbrella insurance can make it much easier to cover those claims without dipping into your own pocket.
The cost of adding an umbrella policy to your current coverage depends on the amount you are seeking. A typical $1,000,000 umbrella policy can run anywhere from $150-300 per year – a very small price to pay for the increased limits you will be receiving. Call us here at the Dickstein Agency for more details to find out if an umbrella policy is right for you.
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