Emma Gutierrez: Hello! I am Emma Gutierrez with Wells Fargo & Company. Today we are discussing why you might need an Umbrella Liability Insurance Policy. Umbrella Insurance is designed to protect you against losses that go above the limit of your homeowners, auto, renters, and other insurance policies. It may also protect you in cases of libel and slander. For example, if you are ever sued, your standard homeowners or auto policy will provide some liability coverage, such as paying for judgments made against you and your attorney's fees, up to the limit set in the policy. You may also want to consider having an extra layer of liability protection. That's what a personal Umbrella Policy provides. An Umbrella Policy kicks in when you reach the limit of your underlying liability coverage and are typically inexpensive because of this reason. Most insurers require you to have a minimum of $300,000 or $500,000 in your liability coverage on your vehicle and home. For example, if you have $500,000 in liability insurance on your auto policy and a $1 million Umbrella Policy, you will have a total of $1.
5 million in liability coverage. Many financial advisors recommend that everyone have at least a $1 million Umbrella Policy to provide liability coverage beyond the limits of their auto and Homeowners Insurance policies, even if they have less than $1 million in assets. That's because in the rare event you are sued, you could be forced to pay a legal judgment from your current assets and future earnings. The Umbrella Policy can also pay for defense cost, which can quickly add up even if you win your case. An Umbrella Policy is especially important if you have sizeable assets, like a home with a large amount of equity, or if you want to help ensure that a catastrophic claim will not put the personal assets you have worked so hard for at risk. Many people find an Umbrella Policy makes sense, because of the protection and peace of mind it can provide.