Thursday, February 24, 2011

Do you have your umbrella?

With all this wild New England weather we’re having, do you have an umbrella? No, not the umbrella to protect you from getting wet, an liability umbrella!

Whatever policy you purchase, whether it is a homeowners, personal auto, or even your business insurance, should contain a liability section. This limit provides coverage for bodily injury, personal injury or property damage. Typical limits on a homeowners policy are $300,000, and for automobile a split limit of $100,000/$300,000. (Winnie and Phinn will explain split limits in another post!) Although these limits seem like quite a lot of money, if you have a catastrophic accident, you’ll be surprised how quickly this money can be spent.

An umbrella policy provides excess limits in addition to your primary policies. The lowest umbrella you can get is $1,000,000, and you can buy limits higher if you’d like. This policy steps in if your primary, or “underlying” limits are exhausted. If you have $500,000, and have $700,000 in losses, the umbrella would drop down to provide that additional $200,000. The only cost that you would pay out of pocket would be the deductible for this policy, which is typically $250.

Winnie and Phinn hope they’ve explained a little bit better what an umbrella is, and the protection it provides, however they still suggest you call Coffey Insurance today if you have any questions!

Until next time…

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