Nashville insurance insight: What’s an umbrella policy, and why would I need it?
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There are lots of insurance options most of us have no need to learn about. Prize indemnity insurance. Political risk insurance. Equine Liability Insurance.
But if you’re shopping for insurance in Nashville, and you don’t already know the ins and outs of umbrella policies, I’d definitely encourage you to brush up a little (and I’m glad to help you do so).
It’s not complicated, just lesser-known to many Nashvillians (many Americans, really). And it can be significantly valuable, while not being significantly expensive.
Umbrella insurance: the basics
Umbrella liability policies are pretty aptly named — they kind of unfold on top of your other policies, providing extra protection, and filling in any gaps.
Think of it like this: Say you have an auto insurance policy with a liability limit of $300,000 for bodily injury, $100,000 for property damage. An accident happens, including serious injuries, and you’re at fault. Your basic auto policy will cover damages/injuries up to that amount, but if resulting claims go beyond, you’re responsible. And the amounts could be considerable.
What if you’re involved in a multi-vehicle accident? What if the other driver impacted is a Grammy-winning guitarist who claims loss of income? (We are in Nashville…) I hate to work in hypotheticals, but this stuff happens often enough that it’s necessary to consider.
An umbrella policy kicks in once your limits are reached, and covers additional costs up to that larger limit, usually starting at $1 million.
Different types of umbrella policies
At Tucker Coverage, we deal with a mix of personal insurance and small-business insurance in Nashville. Umbrella policies are available for both.
- Personal umbrella liability
This stretches over your other basic insurance policies, car insurance, home insurance and renters insurance included. So in the case of a claim with any of those individual policies, you have an extra layer of protection.
- Business umbrella liability
Business umbrella liability policies can add extra protection in a few different ways. Like personal umbrella coverage, it lifts the liability limit that you have in place with your existing coverage. It can also protect you against certain types of liability that your existing coverage doesn’t include. (Think of something like a business auto policy that only covers a specific location. Your umbrella policy could open the map up.)
How much umbrella policies cost
If the “starting at $1 million” made you assume umbrella policies are a big financial stretch, let me dispel that thought. Umbrella liability policies tend to be surprisingly affordable, considering how much protection they offer.
As with all insurance policies and insurance shoppers, it differs depending on individual needs and circumstances. But here’s a ballpark estimate from the Insurance Information Institute, to give you a basic sense: “For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.”
So, low end, somewhere around 12 bucks a month for $1 million in coverage; high end, closer to $25. Less than most of us pay for one night of popcorn/soda at a movie theater, not counting the tickets.
When to shop for an umbrella policy
Since it’s workable into most budgets, I’d generally say if you own a car and rent a place in Nashville, an umbrella policy is worth looking into. If you own a home, I’d encourage it more enthusiastically. If you have any kids, turn that up to 10.
If you have assets that could be considered at all significant and you don’t already have an umbrella liability policy, I’d say you’re overdue. And again, I’d say that even if you don’t call Tucker Coverage to shop for insurance in Nashville. I’d just like to see my neighbors well-protected.
If you’d like to know more about umbrella policies — or other kinds of personal or small-business insurance — I’d be happy to help. Just call or email Tucker Insurance, and let me know what you need.
Another easy way to get started: Head here for an online insurance quote.
If you have any thoughts about other insurance topics you’d like to see me tackle on our blog, please reach out, or share on the Tucker Coverage Facebook page.