Umbrella Policy Answers From An Independent Insurance Agent In San Diego, CA

Why Do I Need An Umbrella Policy?

If you’re like most people, you have an auto insurance policy, and/or homeowners policy, and figure that’s enough coverage, right?  Why would you need anything else?  The surprising truth is that while you may have enough coverage to satisfy the state minimum requirements to drive legally, or to satisfy your mortgage lender, you very likely do not have enough coverage to protect your assets if you are sued.

We’ve all had close calls and near misses while driving.  Have you ever taken a second to adjust your radio, check your email, or send a text while driving, and then look up to see that traffic has suddenly stopped and you almost rear end the driver in front of you?  Maybe you’re one of the good drivers who never check their phone while they’re driving — good for you!

How about if a bee flies in your window while you’re driving, and in a panic you swerve and cause an accident?  Or maybe you’re involved in a collision with another driver, and you’re not at fault, but there are witnesses that side with the other driver and you get blamed for the accident?  What if the other driver is a surgeon and her operating hand is injured and she can’t operate anymore?  What is the dollar value of her lost earnings over her lifetime?  Or what if a passenger in the other car becomes disabled due to the accident or loses their eyesight?  Bodily injury settlements in these cases can get extremely expensive in a hurry.  Stuff happens!  That’s why you have insurance, right?

What Happens If The Damages Exceed My Coverage Limits?

Here’s where it gets ugly.  If you cause an accident or have a someone gets hurt at your house and their injuries exceed the coverage limits on your policy, then you become personally liable.  This means that the attorneys can come after you and try to take your assets to satisfy any judgments against you.  In other words, you could lose your home, any valuable personal property, savings accounts, and can even have your wages garnished until the outstanding judgment has been satisfied.

Do you really want to start over?  I’ve heard some people say that you can’t get blood from a turnip, or that they don’t have any assets for the attorneys to take, but do you want to deal with the hassle of having them harass you?  If you drive a car, or own a home or business, then an umbrella policy is vital to your protection.  Remember, you don’t have to be a millionaire to be sued like one.

How Does An Umbrella Policy Work?

An umbrella policy will kick in and provide excess coverage over and above what the policy limits on your home or auto insurance policy.  For example, let’s say that you have $250,000 per person and $500,000 per accident for bodily injury liability coverage on your auto policy.  If you cause an accident, and the injuries exceed these amounts, then your umbrella policy would provide coverage over and above your auto policy maximum, up to $1,000,000 additional or more depending on how much coverage you decide on.  The typical premium for a $1,000,000 umbrella policy is only around $20 per month.  You can get higher limits of protection (2 Mil-10 Mil+) depending on how much coverage you need.

Are There Any Other Benefits Of Having An Umbrella Policy?

If you package your homeowners, automobile, and umbrella together with the same company, you qualify for a multi-policy package discount, which can be substantial.  The best part about having an umbrella policy though, is having the peace of mind knowing that if something happens, the insurance company has a good amount to work with to settle any claims against you and keep your assets safe.

There are other differences between umbrella policies from company to company.  The advantage you have of working with an agency like us, is that we can explain the differences, and find the right policy to fit your situation.

For a personal consultation to review your specific needs, head over to our contact page, or feel free to call me at 858.581.2131 or email

All my best,

Todd Payne

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