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It Could Be You! Why You Need Umbrella Insurance OH: You are driving back from an out-of-town wedding late at night. You purposely didn’t have any alcohol because you knew you had the long drive back home. As the miles slip by, so does your energy, but you only have 50 more miles to go. A few hours later, you wake up in the hospital learning that you fell asleep and ran into another driver. All things considered, you are in pretty good condition, but there were two passengers in the other car with significant injuries.

Now you start taking account – will your auto liability limit of $300,000 be enough? A claim involving two severely injured people can total far more than $300,000. Your insurance company offers to settle with the injured passengers for the entire limit of your policy in exchange for releasing you from any further liability. The injured parties have spoken with attorneys and think the claim amount, considering the seriousness of their injuries, should be closer to $750,000. They file suit even though they know your liability limits are only $300,000. They also know you own a house, two cars, a boat and a vacation cabin – all soon to be theirs.

Sound bleak? Do you remember reading or talking to someone at our agency about umbrella liability? The umbrella policy blankets over your auto and homeowner policy and gives you worldwide coverage for liability exposures. Umbrella policies are either "excess" forms or "drop-down" forms. The excess form picks up when a loss is covered under your home or auto policy but the limits are exhausted. In some situations, the drop-down form offers protection when the underlying policies do not. This is the feature that distinguishes an excess policy from what is commonly understood to be an umbrella policy.

The cost for this important coverage is usually very reasonable, under $200 a year for a typical two car, one home exposure. If the unforeseeable claim does occur, you will still be able to sleep well at night knowing that your personal assets are protected.