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5 Answers to Your Umbrella Insurance Questions

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Provided by our friends at Leavitt Group


Everyone knows an umbrella protects you from inclement weather and blazing sun. But did you know there’s another type of umbrella that can help protect your way of life? Here’s what you need to know.

What is an umbrella insurance policy?
Umbrella insurance policies provide additional insurance when a claim surpasses the limits available under your homeowners or auto insurance.

Why do I need umbrella insurance?
If you are held liable for an accident and the cost surpasses your insurance policy limits, you will be left to pay the remainder out of pocket. According to, “In order to cover the costs, you could be forced to use money from your current assets—such as savings, retirement accounts, your home or even future earnings.” The good news is an umbrella policy can cover this gap and it’s relatively affordable.

What could put me at risk?
Most people need an umbrella policy to adequately protect their current assets and future earnings. There are many risk factors that make an umbrella policy worth considering:

  • Owning rental properties

  • Owning a swimming pool

  • Having a teenage driver

  • Entertaining guests

  • Driving a high-performance sports car

  • Driving, especially for a car pool

  • Actively participating in online social networks

  • Owning a dog

These factors can amplify personal liability if an accident causes property damage or injury, which could lead to a lawsuit. Your auto or home policy’s limits can quickly be exhausted which makes an umbrella a critical step in risk management. Mitigating risk by avoiding distractions while driving and keeping the gate to your pool locked is also wise.

How much coverage do I need?
Most insurance companies offer policies ranging from $1 to $10 million. Specialty insurance companies can write umbrella policies up to $100 million. The amount of coverage needed depends on the underlying liability limits on home and auto policies, and the cost will depend on a variety of factors including: where you live, how many homes, automobiles and boats you own, and the age and number of drivers on each policy (availability varies by state).

How does the coverage work?
Certain coverage limits must be in place on your auto and home policies before the purchase of an umbrella policy. If there's a judgement against you for a claim that’s covered by your auto or homeowners policy, and it exceeds your coverage dollar amount, the umbrella policy kicks into effect.

Determine how much coverage you need on an umbrella policy by contacting your insurance advisor for a risk assessment.

Did you know that Mountain America Credit Union has a full portfolio of insurance products to offer our members? And that includes umbrella insurance. If you’re questioning whether you have enough coverage, meet with one of our insurance advisors—we can explain, in detail, the benefits of an umbrella policy, how it works and how to calculate how much you’d need.

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