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A friend recently asked, “why would I need an umbrella policy if I already have car or homeowners insurance?” Umbrella or “excess” policies are a form of liability insurance that protects the assets and future income of policyholder or insured person over and above any primary (home/auto) policies. Umbrella policies typically cover at least $1-million dollars beyond the limits of typical auto and homeowners insurance policies. The existence of such a policy can obviously be immensely valuable from the standpoint of both the car or home owner being sued as well as a person who suffers a catastrophic or life-altering injury

In addition to negligence claims associated with vehicle operation or property ownership, an umbrella policy may also provide coverage for such things as:

– Injury (due to pet, or any dependents)

– False arrest

– False imprisonment

– Defamation

– Invasion of privacy

– Malicious prosecution

Umbrella policies are relatively inexpensive and most will require you to have existing liability insurance on your car and home. Some experts recommend that umbrella policies should be obtained if any of the these apply:

– A long commute

– Driving during rush hour

– A swimming pool in your home

– You own a dog

– You frequently have guests over

Umbrella policies are essentially “bad luck insurance” and it’s always better to be safe than sorry.

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