What Is an Umbrella Insurance Policy?

An umbrella policy is simply an extra layer of insurance coverage that sits on top of your base coverage provided by your car, home/condo/renters, boat, motorcycle, or ATV insurance.

The umbrella insurance policy may be used when the underlying liability limits have been exhausted.

Let’s review an Umbrella Insurance Scenario:

Your newly licensed 16-year-old son, because of a lack of experience causes a car accident and injures two people. The first person suffered only minor injuries but the second person named Bobby was seriously injured and suffers a permanent disability due to the car accident and can no longer work at his profession.

Bobby files a lawsuit against you as the parent, seeking $2 million due to his injuries and his loss of employment income. A judgment is assessed against you for $2 million.

This Is How an Umbrella Insurance Policy Works

Let’s assume that your base coverage limits of your car insurance policy are $500,000. (Many companies require a minimum of $250,000 per person, $500,000 per accident coverage for liability insurance. In this instance we’re assuming that the company required $500,000 in combined single limit liability coverage.)

So in this instance the $500,000 of base liability coverage on your car insurance policy goes toward the $2 million judgment and at that point your umbrella policy kicks in.

If you have a $2 million umbrella policy, $1.5 million is paid from the umbrella making a $2 million payout.

Umbrella Insurance in Cincinnati Is Very Affordable.

If you’re considering an umbrella insurance policy in Cincinnati they are much more reasonable than you may think. A $1 million umbrella policy could cost you as little as $140 per year.  You can read this additional article on why umbrella coverage is important by clicking here.

Call 513-662-7000 to Speak with the Umbrella Insurance Experts in Cincinnati