Identification

• An umbrella insurance policy is not meant to act as a stand alone policy. It is instead purchased in addition to a homeowners policy and an automobile policy. In order to purchase an umbrella policy, you must have the highest available coverage on your homeowners and automobile policies. Umbrella policies have a high deductible that is meant to be covered by other insurance policies. Coverage from the umbrella policy kicks in when the other insurance policies have paid out their limits or when the liability is not covered by the other insurance policies.
  
  

Cost

• Umbrella insurance policy coverage can be for anywhere from one to five million dollars. The coverage is relatively cheap to obtain. The typical umbrella insurance policy for one million dollars worth of coverage costs about one hundred to three hundred dollars a year. When deciding to purchase an umbrella policy, consider the value of the assets that you own. You should purchase enough coverage to protect all of your assets.
  
  

Benefits

• Any person who has assets could benefit from an umbrella policy. If a person wins civil damages in a lawsuit against you, your assets could be at risk. An umbrella policy would pay the civil damages and protect your assets, allowing you to keep them.
  
  

Misconceptions

• Many people think that only rich people need to get an umbrella insurance policy. This is not true. If you own assets, then you could benefit from an umbrella policy. Your savings accounts, automobiles and house are all assets.
  
  Another common misconception is that honest people do not need an umbrella insurance policy. This is also not true. Even a honest person can get sued. Accidents happen in life and unfortunately cannot always be avoided. A person can fall off the steps of your home or you can get into a car accident and injure a person. Either of these injuries can cause damages to the person that exceeds the coverage of your homeowners or automobile policies. An umbrella policy would pay the excess financial damages.
  
  

Expert Insight

• An insurance agent can help you to determine the amount of umbrella insurance coverage that you should purchase. Personal net worth is just one factor to consider. An insurance agent will help you to predict the possible financial risks that you face in your life. For example: People with certain jobs face a greater chance of lawsuit being brought against them. If you do not have enough coverage, your assets could be left vulnerable. Many of the large insurance companies offer umbrella coverage. Speak with one of their licensed insurance agents for advice. A little bit of foresight to purchase an umbrella insurance policy can save your assets in the future.