Personal Umbrella Insurance
Personal umbrella insurance acts as protection once your other liability policies have been exhausted. In cases where personal umbrella insurance is not purchased, causing an accident can result in your surrender of all your material goods in order to assess their value. Most often the property is assessed is the home you own and your cars. Other property like jewelry and financial assets may also be part of the pot a person in a lawsuit can claim. Additionally, a portion of your salary can be garnished to go to any successful claimants for many years, if not for the rest of your life.
Even if a lawsuit does not result in a huge reward, court costs are frequently high and exceed amounts an auto or home insurance will not allow. Personal umbrella insurance will also step in to allow for repayment of court costs without your needing to sell assets to meet these costs.
Personal umbrella insurance coverage and costs vary by company. Most require that you carry a defined amount of liability on your car or home policy. If you do not meet this requirement, you will be personally liable for the difference between the liability limit you should have carried and the limit you do carry.
Most personal umbrella insurance policies can insure liability at huge numbers, often starting at 1 million. Policies can stretch to the multiple millions, and what you own should determine what you purchase. A personal umbrella insurance is a must, to avoid losing what you have. With lawsuit awards on an upward trend, it's probably wiser to purchase a personal umbrella insurance policy that can offer you 5 million, however people with fewer assets 1 or 2 million may be sufficient.
Special Note: This summary outlines in general terms the coverages afforded under some policies. Examine the policy carefully for any exclusions, limitations, or any other terms or conditions that may specifically affect coverage. The terms and conditions of the policy prevail.