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Homeowner’s Insurance: What is Umbrella Coverage? | RISMedia, RISMedia

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Thursday, October 10, 2019

By John Voket

If you’re a homeowner, you likely already have homeower’s insurance. But do you have umbrella coverage, or fully understand what this coverage means? Any homeowner – or homeowner-to-be – should have a little background on this all-encompassing security blanket.

Paul K. Improta, CPIA, AAI, LUTCF of Underwriters, Inc. points out that in the event of someone getting injured on your property, your basic liability insurance may help, but may not cover all the resulting costs. For this type of comprehensive protection from a potential financial storm, umbrella insurance could be the right product to consider. Umbrella insurance, as Improta explains it, is a form of liability insurance designed to provide an all-encompassing level of protection. 

So, basically, this coverage picks up where other forms of liability insurance leave off. The nonprofit Insurance Information Institute (iii.org) offers these important points about typical umbrella policies:

– An umbrella policy will kick in when you reach the limit on underlying liability coverage in a homeowners, renters, condo or auto policy. 

– Besides protecting you if someone is injured on your property, the III says umbrella coverage will cover you if you are sued for libel and slander.

– The III says there are certain limits that typically must be met to qualify for this coverage. 

– Most insurers will want you to have about $250,000 of liability insurance on an auto policy and $300,000 on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.

– The III says for about $150 to $300 per year you can buy a $1 million personal umbrella liability policy, the next million will cost about $75, and $50 for every million after that.

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