Thanks for the question!
First, let’s agree on a definition of umbrella insurance. Umbrella insurance is coverage that gives you additional liability protection. (Such policies are often called “umbrella liability policies.”)
While your auto and home policies will give you some liability protection, in our litigious culture, these policies occasionally aren’t enough. The function of umbrella liability is to pick up the slack, to give you added protection when your home or auto insurance comes up short. In fact, these policies don’t kick in unless you’ve exhausted the liability limits on your home or car insurance.
According to the Insurance Information Institute, a person can buy $1 million in umbrella coverage for $150-$300. But as with any insurance policy, the premium will be based on your unique situation. It’s also worth noting that costs vary widely across insurers, so it pays to shop around and get multiple quotes before you settle on one.
Unfortunately, we live in a rather sue-happy society. If you’re looking for protection against a potentially devastating lawsuit, liability coverage is a great option. Despite being relatively inexpensive, umbrella policies haven’t caught on with the majority of Americans. According to a 2007 study by the National Association of Insurance Commissioners, 63 percent of Americans lack umbrella liability coverage.
So you’re ahead of the curve, Roy! Best of luck finding a policy!
Please note: InsureMe Answers is not intended to be a substitute for advice from a licensed professional. For specific questions about a policy or claim, please contact your insurance agent or company.