Preferred Financial Group

"We listen, we educate, then we perform like no one else in the industry."

 

Frequently Asked Questions

"What Is Umbrella Insurance?"

 

It is liability insurance that provides protection in excess of an insured’s specified limits of their primary homeowner’s and automobile insurance policies. Oftentimes these policies provide broader coverage than what is covered in typical homeowner’s and automobile policies. In cases like this, an umbrella policy acts as primary insurance for losses not covered by the other policies.

 

Things to consider:

    • A few examples of liabilities that might be covered in an umbrella policy that may not be covered in a homeowner’s policy would be libel, slander, invasion of privacy to name a few.
    • Typical Limits of Liability coverage range from $1,000,000 - $5,000,000, usually in million dollar increments.
    • If you are in need of additional coverage, it is available as a separate Excess Umbrella Insurance policy…usually place through a specialized insurance company.
    • It is one of the best buys in the insurance industry. A $1,000,000 policy will normally have an annual premium of less than $200 and even less than that for each additional million.

 

Illustrated: 

Rob and Marge have live conservatively all their lives. Even after putting their children through college, they were still able to build a net worth of nearly $2,000,000. They felt like they were now on easy street and were until they caused an auto accident that cause property damage and bodily injury and resulted in a legal settlement of $1,000,000 to the injured parties. Their auto policy provided Bodily Injury Liability coverage of $500,000 and Property Damage Liability coverage of $100,000.  Here’s what happened. Their insurance company paid the limits of the policy totaling $600,000 and Rob and Marge we responsible for the balance of $400,000…putting a measurable dent in their net worth.