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How Much is Umbrella Insurance Going to Cost You?

Industry estimates show 1-in-5 individuals with asset-wealth do not have enough insurance coverage. And, 50% of those with a high net worth believe they don’t have enough coverage.

You may be asking, “How much is umbrella insurance going to cost?”, but the answer isn’t so simple.

First, consider your possible losses without any coverage. Though you likely have policies for your home and cars, there are limits, and anyone with assets near $1 million has much to lose if the liability exceeds those limits.

For example, you may not have any coverage if you lose your income. If the unexpected should happen, such as a lawsuit against you, your current insurance may not be near enough to cover the legal costs and damages. There are some risks you can prepare for and others, not so much. You can fence in your pool, so no one wanders in, but you cannot stop every possible threat in your life. So, before looking for an answer to the question, how much is umbrella insurance, there are a few other factors you’ll want to consider.

how much is umbrella insurance - Save-On Insurance Services

An umbrella policy reduces unneeded stress. This type of plan ensures there’s a cushion between you and financial disaster.

What Really Impacts the Cost of an Umbrella Policy?

The first consideration are your assets. Adding up your net worth will be your first homework assignment. Merely adding up the value of our home, cars, savings, and retirement is not enough. There may be much more to the story such as antique collections, businesses, and future income. If you are unsure about how to calculate this and what should be included in that calculation, it’s critical you work with an attorney, CPA or financial advisor.

Knowing exactly how much you need to cover takes the guesswork out of buying enough coverage.

Other factors affecting individual coverage options are going to be the place of residence, credit history, and the driving record of each household member. Gathering that intel to share with your insurance agent is your next assignment. Additionally, specific risks such as those who play sports or travel for work will affect the outcome. All of this information can help a California insurance agent find the best possible options for you in today’s market.

How Much Coverage is Suitable?

An umbrella policy should cover all your liability. So, when answering how much is umbrella insurance, we should first take a closer look at your potential liability and risk factors. For example, if you experience a car accident, your auto policy will include you and your car. But, what if you are at fault and the other driver has serious injuries? Your policy limits may not be enough. And, if the driver is unable to work or needs extensive therapy and compensation for loss of wages, you may be liable. If you’re in a career that requires you to spend more time behind the wheel, your risk factors are higher.

Industry experts have cited lawsuits exceeding $1 million when pain and suffering is part of any settlement. Do you have extra cash laying around to cover those costs?

Umbrella policies start at $1 million. More may be necessary if, for example, you have two young drivers living at home; (more risk of costly accidents), but your Insurance Agent can help advise you on the recommended course of action.

What Does an Umbrella Policy Cover?

An umbrella policy can extend limits on your current coverage. It can also cover what your current insurance company does not.

In the case of an auto accident, liability amounts are a set amount. If the cost of the injuries or lost income exceed your policy limits, the umbrella policy pays the excess. The same is true for your home policy. For example, brokers often recommend landlords carry an umbrella policy so, if a tenant damages the property, the landlord’s plan can pay for what a typical homeowner’s policy cannot.

Anyone with a business interest should make sure they extend coverage for liability.

What If a 1 Million Dollar Policy Is Not Enough?

Generally, the cost of coverage is very affordable. You will want to have a licensed pro study the current coverage before deciding on the amount you’ll need. But, an additional $1 million of coverage is less than the first $1 million. For example, if the initial policy is $400 per year, the second $1 million of coverage will be less than $400. And, there are policies which can have limits of up to $10 million.

Most insurance professionals advise getting more coverage than you think you will need. This way, you know the worst catastrophe won’t leave you worse off than if you had no coverage at all.

Does an Umbrella Policy Cover What My Insurance Won’t?

Yes. Many times, families find out too late their coverage does not extend to their specific need.  What if your water leak causes damages to another person’s home? Then there are those special or isolated situations. Example, those who often travel outside the country have additional risks others will not. A rental car coverage on your auto policy does not extend outside the U.S.

If the cause has no provision in your existing policy, you are bound to pay everything out of pocket.

For professionals in the public eye, there are unique risks. Protection from suits of libel or defamation of character can be costly. An umbrella policy can provide for the legal costs and the amount of settlement, if necessary.

The more risks you have, the more coverage you should have.

What to Consider When Asking About the Cost of Umbrella Insurance Coverage

Just like insurance policies, no two individuals or families are alike. A plan right for one person, may not be right for another. Therefore, when the time comes to answer the question, “how much is umbrella insurance?”, be sure to get a professional involved to help you look at all aspects of your personal and business life and the considerations that come with each to help you devise the best options.

Save-On Insurance can help you better understand all the coverage options available and the pros and cons of each. Once you’re armed with that information you need to consider what you are comfortable committing to within your budget. Then, consider the risks you have outlined. These considerations should include real estate property (homes), cars, boats and recreational vehicles, travel, and your professional profile. And you will want to add everyone in your family as well. Future income or college plans should also have protection.

It’s more than coverage; it is peace of mind.

With a strong umbrella policy in place you know your planning and hard work won’t fall short due to events you have no control over.

More Questions?

We know you invest a great deal in your life and we’re here to help you with a solid plan. Let us show you how you can invest in protection.

Our professionals can build an insurance portfolio to match your current financial and security needs. Because Save-On Insurance Services is an independent insurance agency, we can also find the best protection at the best price with access to multiple top rated carriers.

Contact us for a quote today.