What is umbrella insurance?

No, umbrella insurance doesn’t cover the nifty handheld device that keeps you dry when it rains. This type of insurance policy earned its name from the extra liability protection it affords its owner. Known as a secondary insurance policy, a policy owner can add umbrella protection to an existing primary policy.

Primary vs. Secondary Policies

When you shop for insurance for your Austin, TX home, business, or vehicle, you purchase a primary policy. That means you either purchase a homeowner’s, business liability, or auto policy. Each of those types of insurance policy includes a liability component as a part of a larger policy, making it the primary policy.

When you purchase primary insurance from Frederick Insurance, you gain the option of adding umbrella coverage, a secondary coverage, to it. Umbrella insurance only consists of liability insurance. It increases your liability coverage.

How Umbrella Works with Your Primary Policy

No matter what kind of primary insurance you purchase that contains liability coverage, it also contains a policy maximum. The term policy maximum refers to the total amount of liability coverage availed to you in the policy. For example, if you purchased the state minimum auto insurance, your total liability coverage for all people involved in an accident would top out at $60,000 for bodily injuries and $25,000 for property coverage.

Without umbrella coverage, any damages you caused that cost more than that would come out of your pocket. If the individuals hurt in the accident incurred medical bills of $100,000, you would need to pay the other $40,000 that insurance did not cover out of your pocket.

With umbrella coverage, once the damage payments maxed out the primary policy, the umbrella policy would kick in and cover the rest. You would not pay anything out of pocket.

How Much Does Umbrella Coverage Cost?

Your potential discounts vary from the next person’s, but typically, umbrella coverage costs a few dollars per month in premiums for a $1 million policy. Roughly, the typical monthly premium costs about the same as two mocha coffees at your local Austin, TX coffee shop.

Contact Us Today

Contact Frederick Insurance to add umbrella coverage to your primary policy. Once you purchase an umbrella policy, it applies to every primary policy you own. So, whether police find you at fault for an auto accident or someone breaks a leg playing around your swimming pool, your insurance covers you. We are happy to help!