No, we're not asking you to take out a policy on your soggy-weather gear. Yet much like an umbrella, this aptly-named insurance provides you with a canopy of protection against catastrophic financial events. Picture this:
- Your neighbor slips in your yard and successfully sues you for $2 million. But your homeowners insurance tops out at $500,000.
- Your teenager is at fault in a major car accident, harming several people and causing damage well in excess of your $300,000 car insurance coverage limits.
- Your dog bites and seriously injures a child. You are liable for the extensive medical expenses.
These are just a few unfortunate (aka: nightmare) situations in which a personal umbrella policy could come to the rescue by providing additional coverage up to the limits of your umbrella policy.
In other words, once your primary insurance coverage runs out - whether it's your homeowner's insurance, car insurance, or boat insurance - your personal umbrella policy kicks in. Plus, umbrella insurance covers many situations that typically aren't covered by other liability policies.