In your recent column on “5 kinds of insurance needed”, under umbrella coverage,you stated ones requirement to have the “maximum underlying coverage” on the residence and auto policies.” I have a 1 M umbrella from Farmers (for $156 annually) but do not understand how to evaluate “maximum underlying coverage” on the home and auto policies!
Many thanks! Warren
Terry Says: When purchasing an “umbrella” policy, the insurance company will specify what the underlying limits must be. You don’t have to evaluate it; you just have to decide that the typical limits of your homeowners and auto liability portions might not be enough if someone sues you. That’s when you buy additional coverage in the form of an umbrella.