An umbrella insurance policy, that is. It will protect your assets and income when the limits of your homeowner’s and auto policies are reached. Without one, you could have a lot to lose.


Equifax Personal Finance Blog recently posted an article on the topic by insurance expert Linda Rey. “

Umbrella Insurance: The FAQs” details the benefits of having a policy. It’s interesting to note that the policies are purchased in increments of $1 million. Rey advises purchasing one even if your net worth isn’t equal that amount.

But when you add up the value of your luxury home, any vacation homes you own, your investments and current assets along with your earning capacity and future pension income, your net worth can add up fast. And in one bad law suit, it can be wiped clean without the proper insurance.

In addition to a pool, the article also suggests you consider an umbrella policy if you have teenagers, dogs, motorcycles, boats or RVs, as these also tend to increase your chances of being the target of a lawsuit.

What if the lawsuit is extraneous? With an umbrella policy, your insurer will typically send legal representation. In this case, the umbrella policy may help you get out of the suit altogether.

Rey explains that umbrella policies are different from personal excel liability policies because the latter come into play only when you’ve reached the limits on your auto and/or homeower’s policies. Umbrella policies will actually fill in places that your other policies won’t touch. These may include coverage overseas claims, personal injury claims or claims for family members. , among others


Equifax Personal Finance Blog gives a more complete description of umbrella policies and why you probably need one. Plus, you can leave your comments or questions for Rey.

Leave a Comment

Your email address will not be published.

Scroll to Top