Why Get an Umbrella Insurance Policy

Umbrella Insurance Policy

A retiree having a net worth of $4 million went to an asset protection specialist recently after his wife was in a car accident. She was being sued for $10 million. The attorney was dismayed to learn that the couple carried only $100,000 in auto liability coverage, and had no umbrella insurance policy.

One of the most important points of Asset Protection is to get an umbrella insurance policy. An umbrella will unfurl when the limits on your homeowner's and auto liability insurance policies are exhausted. A $1 million umbrella insurance policy can be purchased for under $200 a year. A good umbrella policy should cover you for miscellaneous events, such as an accident on a rented motorbike, or liability if you do volunteer work. However, the list of "exclusions," (i.e, items that aren’t covered) in most policies has been growing for the past 15 years. Since exclusion lists vary, it is advised that you shop around based on your own risks. For example: Most umbrella insurance policies exclude long-term pollution damage, but some will still cover damage from a sudden catastrophe, such as your in-ground heating oil storage tank springing a leak.