Shield From Excess Liability

Millions in Coverage, Hundreds Per Year

Umbrella policy cost is heavily dependent on the amount of coverage you need, the risk of a loss, and the gaps in your current policy. If you need 10 million dollars of insurance, then you might pay only $625 per year. Generally speaking it is a couple hundred dollars for the first million in coverage, less than a hundred for the second million, and about $50 for each additional million. It is important to note that some umbrella insurance companies may not go over two million dollars in coverage, but if you are super-rich then the right insurers will beat a path to your door.

Personal Umbrella Policy According to an article in Forbes, many people with assets over five million dollars don't have a similar amount in coverage for their assets. The article goes on to describe some extreme and gruesome cases which led to very high verdicts. While unusual accidents may be beyond the norm, and not everyone is a millionaire, people often forget that they can be sued for a few Facebook postings made by their teenagers if they are libelous or count as cyber-bullying. Something as simple as a dog bite can morph into an expensive, years-long lawsuit that eats up savings and assets.

Could You Handle A Million Dollar Personal Injury Claim?

The cost of not having personal umbrella policies can be astronomical and life-changing. Statistics show that a percentage of personal injury cases are settled in excess of the insurance company's homeowner's or automotive coverage limits. Most people don't realize that they are going to have to make up the difference out of their own assets, and if they don't have enough then they will be forced into bankruptcy. If you don't have enough coverage, your dog bite victim may end up with the title to your house, and your wages could be garnished.

Costs For Annual Coverage

According to a recent white paper, the typical cost for umbrella insurance is $383 for the first million dollars, or $474 for two million dollars, or $1000 for ten million dollars in coverage. If you have several homes, several cars, and a boat, the cost for 10 million dollars goes up to about $1600 per year. While this may seem like a high amount for the average person, there are a lot of factors that would still encourage a low net worth individual to get the basic policy. Activities undertaken by teenagers, or during the course of a party at your home, or as the result of an accident, could lead to liability in excess of an insurance policy. Although you might not be a millionaire, you could still find your wages garnished if you owed a few hundred thousand dollars in excess of your coverage.