Umbrella liability insurance coverage
I have had an umbrella liability insurance policy for many years. I always felt it was a necessary based on some of my hobbies and interests. I have recently retired and am now questioning weather the policy is still needed. I received my policy renewal and the policy has increased 50%. I am on a fixed income. What should I be considering on whether I need this policy or not? FYI- It is not that I cannot afford the policy (I am sure I could adjust other items to make the premium), but do I need to afford the policy.
Terry Says
if you don’t feel you’re in a vulnerable position, likely to be sued, and that your underlying homeowner insurance liability limits are high enough, this is a good time to reassess your need for the umbrella policy.
I’m a bit superstitious and I keep mine. But you know the umbrella only pays out after the underlying has been paid. And it doesn’t typically cover business liability — so if your hobbies are treated as a “business’ on your tax return and expose you to some liability, you should discuss this with your agent. You may be paying for coverage you think you have, but don’t!
Bottom line: It’s up to you to understand your coverage and decide your potential liability.
