What’s an umbrella policy and do I really need one in Indiana?

What’s an umbrella policy and do I really need one in Indiana?


You might have read last week’s blog titled “Why do I need more Auto Insurance Coverage Limits?” There I described my family’s personal experience of when bad things happen how having low limits isn’t enough. In todays blog we’ll dive a little deeper into liability coverage limits and I explain what a Personal Liability Umbrella is and why you might consider purchasing this coverage.

You might ask how much insurance is enough. Your home and auto liability coverage give you protection for bodily injury and property damage only up to the policy limits. After that you are responsible for paying what your policy doesn’t cover out of you own pocket. A Personal Umbrella policy covers you after the limits of your primary policy are used up. Personal Umbrella policies are available in coverage amounts of $1 million-dollar increments.

“A Personal Umbrella Policy provides coverage for claims over and above the limits afforded by your existing policies.”

Back at the beginning of my Insurance career a client came to me to purchase a Personal Umbrella. They had been to their Financial Planner who told them they needed a Personal Umbrella policy. The Financial Planner said that their net worth exceeded their limits of liability and if he were them he would get an Umbrella policy as soon as possible.
When you consider the fact that the Indiana State auto liability minimums are less than the price of a new car today, as well as all the scenarios of unexpected events that could happen to you. You can see where carrying higher limits and a Personal Umbrella policy is recommended.

In addition to a Personal Umbrella policy increasing the limits of your underling policy, it covers you for things not covered by your underlying home and auto liability policies. These additional coverages range from the costs of attorneys’ fees to defend yourself from liabilities such as Libel, Slander, Invasion of Privacy or false arrest.

The amount of liability coverage you should carry isn’t an exact science. It depends on many factors depending on your financial ability to weather the storm when bad things happen. If you have any questions about your insurance, I invite you to contact me today. My commitment as your Insurance Advisor is to help you translate Insurance to English. You might thank me some day when it rains and you have the Umbrella you need.