Umbrella insurance is excess liability insurance. Policies typically range from $1,000,000 to $20,000,000 of additional liability protection. It’s called an “umbrella policy” because it provides additional liability protection that supplements your basic liability policies, such as your auto, home, or renters insurance.

You must have an underlying liability policy in place to obtain umbrella insurance in Florida. Usually, any auto policy must have 250/500 bodily injury liability, and any property or farm must have $300,000 liability in order to meet the Florida umbrella policy requirements.

What Does Umbrella Insurance Cover?

An umbrella policy provides excess liability coverage above the limits of your basic policies. It can provide coverage for bodily injury liability, property damage liability, landlord liability, and various types of lawsuits.

For example, umbrella insurance can protect you in situations such as:

  • Bodily injury and property damage you cause in a car accident.
  • Bodily injury someone suffers in an accident on your property or investment property you own.
  • Property damage you cause in an accident.
  • Additional liability coverage for recreational vehicles you own.
  • Property damage your pet causes.
  • Property damage a dependent or child causes.
  • Attorney fees and other legal costs if you’re sued.
  • Lawsuits and legal costs relating to the invasion of privacy, libel or slander, and defamation of character.
  • Unforeseen situations, such as an accident involving a borrowed vehicle or an accident in another country.

Since umbrella insurance is a form of liability insurance, it does not cover your own medical expenses or property losses.

Why Do You Need Umbrella Insurance?

Your car, house, investments, bank accounts, retirement accounts, and future income are assets. Umbrella insurance is used to protect your assets in the event you do not have enough liability insurance with your underlying insurance policies.

Therefore, people typically buy umbrella insurance to prevent the possibility of financial ruin due to a misstep or unforeseen accident.

What Should You Know About Umbrella Insurance?

You may think that only high income or high net worth individuals need umbrella insurance. However, just about everyone can benefit from having an umbrella insurance policy. And, an umbrella policy is often less expensive than just increasing the limits of an existing policy.

Umbrella insurance is also “portable” in most cases, meaning it will follow you when you travel―even to a different country. It is also beneficial to have umbrella insurance in case you are sued, which could easily exceed the liability limits of your underlying policies.

Furthermore, the cost of an umbrella policy is highly affordable. The specific cost is calculated based on:

  • The amount of coverage.
  • The insurance carrier’s provisions.
  • Your risk profile.

In many cases, you can save money by purchasing umbrella insurance from the same carrier who provides your home and/or auto insurance.

How Much Umbrella Insurance Should You Have?

Since liability lawsuits can result in loss of both current assets and future income, determine your potential for loss.

  • Assets such as property, possessions, stocks, bonds, savings and retirement funds.
  • Future income potential into retirement, and while in retirement.

Now, a determination needs to be made as to the degree your assets and future income are at risk due to potential liability. Consider the risks you face, such as:

  • Could you be prone to frivolous lawsuits?
  • Do you own investment property that is leased to renters?
  • Do you live in an area where there are a lot of accidents?
  • Do you engage in potentially dangerous activities that could put people around you at risk?

As you consider how much umbrella insurance you need, remember:

  • The more assets you need to protect, the higher the umbrella policy limit should be.
  • Likewise, the higher your risk of potential liability, the higher the umbrella policy should be.

ABC Dennis Insurance

ABC Dennis Insurance is an independent insurance agency established in 1997 that provides umbrella insurance to individuals and businesses.

As an independent agency, we find the best coverage with the most competitive rates among multiple insurance companies. This is important because no insurance company can meet every insurance need. So, we shop multiple insurance carriers to find the coverage that best fits our customers’ every need.