Tuesday, December 7, 2010

Umbrella insurance

About $240 a year to cover $1M with 2 cars and a few properties.

With at least $300K liability coverage on every single insured item to be covered under the umbrella.

You need $300K liability insurance coverage on every individual property such as car, house to be eligible for umbrella insurance coverage. The higher the individual coverage is, the less chance the umbrella insurance will need to pay. That's the whole purpose in the insurance companies' point of view.

No. Say it is your fault to cause a damage:
The estimate repair/replacement cost is $500K. Your individual liability coverage is $300K and the umbrella is $1M. After using up the $300K individual coverage, the Umbrella is going to pay $200K. If the damage needs $1.5M to repair/replace, the individual policy is going to pay $300K again which is the limit, your umbrella is going to pay $1M as the limit. The remaining $200K will have to be out of your pocket.

"I have said you have to have a certain level of coverage on the individual policy to be eligible for umbrella. Different insurance companies may have different requirement. All State asks for $300K which is what I quoted."

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