Why have an umbrella policy with your renters insurance? - Consider this additional protection

Question: What does a personal liability umbrella policy cover, and how do I know how much coverage to get?

Answer: Typical homeowners, renters and auto insurance policies provide some protection against personal liability. Although, the basic insurance coverage is essential, it may not be enough to properly protect your assets in the event of an accident. Should you be concerned? Of course. Considering today's litigious society, you should consider a personal umbrella policy to protect yourself and your assets from a potentially devastating lawsuit.

Liability insurance helps protect your assets in the event you accidentally injure another person or cause damage to someone else's property. If you are sued, your policy will cover your legal defense fees, medical payments, and property claims you are found legally responsible for, up to the policy limits. Umbrella liability insurance is an additional layer of protection used in conjunction with other policies that offer liability protection (homeowners, renters or auto).

Umbrella policies aren't just for the affluent as some people think. Accidents can happen to anyone regardless of worth, leaving your assets open if you lose a lawsuit. If you have a car accident or if someone gets hurt while on your property, your auto and homeowners policies have at least some liability insurance that would protect you. If you were sued and the damages are more than the amount for protection you have, you would be responsible for the difference. That means either you would pay in cash, you would have to sell your assets (home, car, investments, etc), or they would garnish your future wages.

Umbrella policies can pay $1 million up to $5 million or more of a claim, on top of what you basic policy covers, depending on which umbrella policy you have. Umbrella liability insurance typically carries a deductible of $300,000 or more, where your underlying policy pays that deductible. Typical umbrella policies require you to have homeowners and auto liability insurance equal to the amount of your umbrella's deductible.