All about Umbrella Policies

With the proliferation of liability lawsuits, umbrella policies are more important than ever. Learn more about this type of Phoenix metro insurance to determine how much coverage you need.

What Is an Umbrella Policy?

An umbrella policy is a supplemental type of Phoenix metro insurance to protect your assets from liability lawsuits. Accidents happen, and the financial repercussions are taxing and stressful enough without adding someone else's expenses to the equation. If you are involved in an accident of any kind and found to be at fault, you are legally responsible for the other party's expenses. Such expenses could include medical bills, costs to repair lost or damaged property, and legal judgments for pain and suffering. An umbrella policy is designed to help you cover these expenses that exceed the limits of your traditional Phoenix metro insurance, such as your homeowners or auto policy.

The Costs of Umbrella Policies

Umbrella policies are sold separately from traditional Phoenix metro insurance policies. They provide coverage above and beyond your basic auto or homeowners insurance. You can add an umbrella policy to your Phoenix metro insurance policies for a very reasonable price-a $1,000,000 policy usually costs around $150-$300 per year. The rate you will pay will depend on your insurer, your coverage level, and your personal risk factors (e.g., credit score and driving record). For the most part, an umbrella policy is a very inexpensive but very valuable supplement to your other Phoenix metro insurance policies.

Who Needs Umbrella Policies?

Simply put, if your assets exceed your standard homeowners or auto insurance coverage, then you are inadequately protected and should consider an umbrella policy. Umbrella policies aren't just for the wealthy-if you own a home, have investments (including retirement accounts), and/or savings, your assets could be at risk. Here is the best way to determine if you need to add an umbrella policy to your Phoenix metro insurance:

1. Add up your assets, including savings, the value of your home, stocks, bonds, retirement accounts, 401K monies, etc.
2. Check the liability coverage limits of your Phoenix metro insurance homeowners and auto insurance policies.
3. If your assets exceed the coverage limits, you need an umbrella policy.

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