Personal Umbrella, also known as excess liability, is extra protection for larger losses that are over the limit of liability that your personal auto, homeowners, RV, watercraft, or personal liability policies provide. An Umbrella Policy only kicks in after your home, auto, or other policy is used and has reached it’s maximum liability limit. These policies typically start with $1million in coverage and go up in $1million increments from there for a very reasonable premium. Because we live in a lawsuit happy society, a Personal Umbrella policy gives you added asset protection if you are involved in a catastrophic loss.
You have $500,000 in auto liability coverage, but you accidentally cause a 10 car pileup on I-35 in Denton, Texas and it is determined to be your fault. The losses add up to $750,000. Your personal auto policy would cover the first $500,000 and the umbrella policy would cover the additional $250,000 in damages. Without the addition of the umbrella policy, you would be personally liable for the additional $250,000 in damages.
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