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Think about adding an umbrella

(Feb. 20, 2013) – Many people keep an umbrella in the car or office, ready at a moment’s notice if blue skies give way to rain clouds. It’s not an act of pessimism, it’s just common sense.

Likewise, a growing trend in the insurance industry is umbrella liability coverage. Much like a regular umbrella does for rain, an umbrella policy shields its holder against liability claims that go above and beyond the limits of personal insurance policies.

For instance, liability coverage provided by a homeowners or auto insurance policy has set limits, such as $300,000. In the event you or someone in your household is liable for injuries or damages to others, you could be responsible for coming up with any excess funds if a settlement exceeded your liability limits.

That’s where an umbrella liability policy comes into play, providing excess liability coverage and potentially saving you hundreds of thousands of dollars.

You might think that such security would come at a high price. In fact, most umbrella policies are relatively inexpensive. In most cases, umbrella policy coverage is available in million dollar increments, from $1 to $5 million. How much coverage you need depends on your lifestyle and accumulated assets.  

For instance, you might have a greater need for increased liability coverage if you have a swimming pool or trampoline on your property, as those items are potentially dangerous and could result in huge lawsuits if a guest of yours is injured. 

On the other hand, some people do not have the same risk factors for large claims against them.

In the end, it is each individual’s decision as to what umbrella policy limits are appropriate.

The personal umbrella policy is a good investment for those who desire extra liability coverage to protect assets like their home, auto, boat, or whose lifestyle increases the need for protection.

Your insurance agent can help you identify your risk factors, and determine if an umbrella policy is right for your insurance needs.

Based in Madison, Wis., American Family Insurance offers auto insurance, homeowners insurance, life insurance, health insurance, business and farm/ranch insurance in 19 states. American Family insurance is the nation's third-largest mutual property/casualty insurance company. Web: www.amfam.com; Facebook: www.facebook.com/amfam; Twitter: www.twitter.com/amfam.