How Much Does an Umbrella Policy Cost?
An umbrella policy, known as a PUP, is a type of insurance that provides liability coverage outside of your homeowners and auto insurance policy. If the coverage with these policies weren’t enough, the umbrella policy would kick in and cover the damages. Basically, this coverage will cover you when your other insurance policies isn’t enough.
How much does an umbrella policy cost?
- The price of an umbrella policy will usually depend on the insurance company that provides it and the coverage that is needed. On average, a $1 to $5 million policy is going to range anywhere from $150 to as much as $500 annually.
- For example, Insure.com is an online website that offers various pieces of information that will enable you to gain knowledge on different matters that concern insurance policies. According to them, the cost of a personal liability umbrella policy is inexpensive and you can actually get one which can cost anywhere from $150 to $300 annually.
- Allstate, a leading insurance company that offers umbrella policies along with all other types of insurance policies, offers personal umbrella policies that are typically available in increments of $1 million to $5 million dollars. All State insists that the price of getting this type of policy is inexpensive, unlike what most people think it may be. As a matter of fact, Allstate insurance provides this policy for anywhere from $350 to $365 annually. Although the individual seeking this type of policy should consider that this is just an add on to their existing policy to add further protection.
What is going to be included?
- There are several reasons that you would want to be covered by umbrella policy; mainly, if you get sued and do not have the umbrella policy, it will be very expensive for you and your property would be in danger. The insurance companies would often retain and pay for your attorney in case you get sued.
- The companies that offer an umbrella policy would also provide protection no matter where you are, even if you are out of the country.
- If you miss workdays due to the fact that you have to show up in court, you will be covered for any wages lost. However, there is usually a limit specified in the policy.
What are the extra costs?
- Most of the insurance companies that offer umbrella policies allow annual payment, which means that you will have to pay for the succeeding years.
- Since an umbrella policy will be attached to a homeowners or car policy, you will have to pay those additional premiums.
- Applicants that have a poor driving history or credit score may pay a higher premium than those that have good credit scores and a clean record.
- Adding younger drivers or people with a bad driving record can increase the premium by more than 30%.
Tips to know:
- An umbrella policy is a great addition to your existing insurance policy as you would be provided with extra protection. When considering one, though, just make sure that you get enough coverage. For the average person or family, a one million dollar policy will be more than enough.
- To find the appropriate amount of coverage, experts will tell you that you should double your net worth and use that as a number. To calculate your net worth, you take the worth of your assets (the things that you own) and subtract your liabilities (the things you owe such as a house payment)
- If you own a business, you may want to carry higher coverage than those that do not own a business. Getting sued while owning a business can not only affect your personal property but can also affect the well-being of your company.
How can I save money?
- Getting this insurance policy is already a means of saving money in the long run. But if you want to save up front, you should begin by asking a few insurance providers to see if they offer bundled policies. InsureMe.com is a great website to use to compare insurance quotes. Having a different company for an umbrella policy than you do for your other insurance coverage will probably be more expensive.