There’s been a lot of buzz lately about an “Umbrella Insurance Policy” and whether or not you need to add this type of protection to your insurance program. In this post, we’ll talk about what an umbrella insurance policy is and the benefits of adding this type of coverage.

An umbrella policy is a liability policy that provides coverage over and above the coverage of your regular policy. We like to say it’s the added layer of protection that protects your assets over and above the limits of your standard liability limits.

As an example, you have an auto insurance policy with a liability limit of $300,000. When you add an umbrella policy with a $1,000,000 limit, you now have liability protection of $1,300,000. Why do you need this additional protection? Consider this – The average personal liability lawsuit judgment in the state of Ohio in personal liability lawsuits is $850,000. A standard liability coverage of $300,000 would leave you with on the average, a $550,000 shortfall.

If the judgment in the lawsuit is against you and your insurance is not sufficient, you are still responsible for the the  difference. The court can require you sell all of your assets, including your home, business, 401K, college savings – essentially everything until the amount is settled. Bankruptcy offers no protection from this type of suit.

The numbers above are only the judgment/settlement amounts and do not include your attorney fees, which can easily be tens or hundreds of thousands of dollars.

In our opinion, an umbrella policy is one of the most important products on the market to protect your assets and future. It is very inexpensive for the coverage you get. The question is normally not “Do I need umbrella insurance?” The real question becomes, “What type of umbrella insurance policy is right for me?”

Call the insurance professionals at the Cincinnati Zimmer Insurance Agency for a review of your risk and exposure as well as a quote for umbrella insurance.