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Homeowners insurance and auto insurance play important roles in protecting your financial assets. Not only do they help to repair or replace your own property, your insurance policies cover your financial liability if you are at fault in an accident or if someone is injured while on your property. However, there are times when basic insurance policies might not be sufficient for your needs.

For example:

  • You are at fault in a serious car accident involving multiple vehicles and injuries
  • Your dog attacks and bites someone
  • A visiting child is hurt while playing in your pool
  • A guest trips and falls in your home or on your property

Any one of these scenarios may lead to your being sued and you may find yourself liable for a claim that is much higher than the limits of your homeowners or auto insurance policy. How will you pay for it? Rather than see your hard-earned assets disappear in a lawsuit, an umbrella policy can make up the difference.

How does umbrella insurance work?

Umbrella insurance is additional liability coverage once the limits of a primary policy (auto or home insurance) have been exhausted. Umbrella policies may also protect you if you’re sued for certain actions, including slander, libel, malicious prosecution, and shock/mental anguish.

Umbrella policies most often provide about $1 to $5 million in coverage. They also will pay legal expenses you incur while being sued, over and above the policy amount.

Umbrella policies protect your current assets, such as your property, retirement or investment accounts, as well as your future assets—like wages or an inheritance.

Your goal in buying umbrella insurance is to protect your net worth. Your L & M Insurance Group agent will be happy to help you decide how much coverage you need.

Who needs umbrella insurance?

If you feel it’s likely you could be sued if you’re liable for someone else’s injuries or damage to someone’s property, you need umbrella insurance. If you own property, have a dog, or often host houseguests and entertain, you may be more likely to be in a situation where you could be sued. And if you have a swimming pool, trampoline or play equipment (“attractive nuisances”), you likely need to carry an umbrella policy. Anyone who would like to have more peace of mind regarding asset protection should consider an umbrella policy.

Is there anything umbrella insurance doesn’t cover?

Since umbrella insurance is liability coverage, it doesn’t cover damage to your own property, or injuries to you or your household members. It will not cover business activities or liability you agreed to by contract. It also doesn’t cover damage that you or a covered member of your household causes on purpose. If you have questions about whether or not something is covered, please discuss these with a L & M Insurance Group agent.

Is umbrella insurance expensive?                    

Not compared to other types of insurance—or compared with losing your assets in a lawsuit. A policy with limits of $1 million generally runs only about $150-$300 per year. Cost is determined by factors including how much coverage you want, how many people will be covered by the policy, and how much property (such as homes and cars) you own.

However, since an umbrella policy is secondary to your existing homeowners or auto policies, usually you’ll be required to carry higher limits on those policies. For example, Bodily Injury limits of 250K/500K and Property Damage of 100K on your auto policy, and 300K-500K personal liability coverage on your homeowners insurance. If you don’t currently carry these limits, your premium for your homeowners and auto policies may go up.

L & M Insurance Group has you covered for all your insurance needs

An umbrella policy is an additional layer of insurance coverage you might need to safeguard your financial future. If you would like to know more, please call L & M Insurance Group at 813-672-4100, or click here to reach us online. L & M Insurance Group agents can help with all your insurance needs, whether you need a homeowners policy, car insurance, commercial insurance, or life or health coverage. We are an independent agency, primarily serving Tampa, Riverview, Brandon, Valrico, and surrounding communities.