Who needs an umbrella insurance policy?

Umbrella insurance policies cover you when your liability exceeds what your normal homeowner’s or car insurance covers. Community Management Insurance Group in Greensboro, NC is here to help you determine if an umbrella policy would be right for you.

How an umbrella policy works

To get an umbrella policy, you would already have to have home and auto insurance. This is a lot easier if both are with the same company. If you have a business, you will have to get a separate policy for the business. The policy kicks in when your liability exceeds the limits of your insurance policy. If your insurance maximum is $500,000 on your home, and you are held liable for $1 million, you will have to pay the other $500,000 yourself. An umbrella policy will pay for that.

Who needs an umbrella?

Often it is wealthy people with a lot to lose who have umbrella policies. Sometimes people will try harder to sue wealthy people.  Most don’t try too hard to sue poor people because even if you win, you will not get the money. Retirees should also consider an umbrella policy to protect their retirement savings, even if it is not in the millions.

A rule of thumb

What is wealthy is relative to many factors. Generally speaking, if your net worth exceeds your insurance limit, you need an umbrella. Adding up your assets, minus your debts, determines your net worth. If that comes to $500,000 for instance, and your liability limit is $300,000 you should get one. In general, young people who have not built up a lot of assets, or people whose net worth is less than their insurance limits, do not need such a policy. 

Give Us A Call

Community Management Insurance Group in Greensboro, NC is here to answer all your insurance questions and help you get the coverage you need.