Let’s Talk Umbrella Insurance!
In today’s post, we are talking about umbrellas. Why in the world would we need an umbrella? We’re in Arizona, 115 degrees, nice and sunny. We’re actually not talking about that type of umbrella. We’re talking about an umbrella insurance policy. So in the last post and video, we talked about your bodily injury liability limits on your auto insurance. We recommended that you get limits of 250,000 per person up to 500,000 per accident. That seems like a lot. Most people don’t carry that. So when we say those limits that seems like a lot, but it’s actually not a lot. Let’s take an example- Let’s say you’re in a covered accident. It’s a three-car pile-up, and you caused it. Suddenly when there’s six, seven, eight people injured that 250,000 per person up to 500,000 per accident seems like very, very little, and you’re probably not going to have enough coverage to pay for everybody’s medical injuries that you caused.
So in that case, what do you do? Well, if you purchased an umbrella policy with a $1 million limit; essentially what the umbrella policy does is it pays in excess or on top of those limits of 250,000 per person, 500,000 per accident, so it’s giving you an extra $1 million in coverage for liability purposes. This also pays in addition to your home insurance. If you have liability limits of 300,000 and a covered claim occurs, and those limits are exhausted, well, the umbrella policy kicks in as well. This does the same thing for any watercraft boats you have, any recreational vehicles. Think of it as an all-encompassing umbrella, exactly like it sounds, that gives you that additional buffer of $1 million in liability coverage. It all pays above an beyond for any covered accidents on top of the liability limits that you have on your normal policies.
Here’s the awesome thing about umbrella policies. They’re extremely cheap. We’re talking an extra two or three hundred dollars a year for $1 million or more coverage. That’s awesome. You can’t beat that. So again, our recommendation is carry those high limits of 250,000 per person, 500,000 per accident, but then add on top of that a $1 million umbrella. If you can go higher great, that gives you even more coverage. But umbrella policies are definitely recommended. They’re definitely affordable, and you should definitely go and purchase one today!