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Umbrella policies supplement the liability coverage you already have through your home and auto insurance and provide an extra layer of protection. Umbrella policies aren't just for the wealthy — they're for anyone who has assets that might be at risk if they are responsible for a serious accident.

If you don't have enough liability coverage to resolve a claim or a lawsuit, the person bringing the action might go after your home or your other assets to pay for damage. Umbrella policies cover damage claims that you, your dependents, or even your pets may cause.

Umbrella policies kick in after the liability insurance in your homeowners and auto policy runs out. For example, if you have a home insurance policy with liability coverage of $300,000, the umbrella policy will pay claims above that amount up to the limit selected.

Most of the risk is assumed under the primary auto or home policy, which is why personal liability umbrella is so inexpensive. You can buy a $1 million or larger umbrella policy for less than $200 a year.

Many companies won't sell you an umbrella policy unless both your auto and home insurance coverage is with them. In addition, your insurer may stipulate that your auto or homeowners liability limits be at least a certain amount, such as $200,000 to $300,000. Umbrella policies are usually sold with a deductible that might run anywhere from $250 to $1,000. If you're on the hook for a multimillion-dollar lawsuit, that's a small price to pay.

When you buy a personal liability umbrella, you're getting more than just higher liability limits. You're also buying broader coverage in case you're sued. The insurer selling the umbrella policy agrees to cover you if you cause bodily injury, property damage, or personal injury.

The personal injury protection offers coverage not found in your auto and homeowners policy. Generally, personal injury encompasses false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction. Most primary policies cover bodily injury and property damage, but not personal injury. Certain umbrella policies also provide coverage if you face liability arising from your service on the board of a civic, charitable, or religious organization.

Protection against claims and lawsuits does more than simply pay for the damages. Even if a lawsuit is frivolous, you still face the expense of defending yourself. Your liability coverage pays for lawyer fees and defense costs, which can quickly add up. This alone is worth it! figure it this way, $200 a year for legal respresentation? can't beat that!

Gap insurance and what your agent forgot to tell you

If your vehicle is totaled for any reason - theft, fire, accident, flood, tornado, vandalism, or hurricane - the value that your insurance company places on it may be a whole lot less that its actual retail value - and it is often considerably less than the actual amount you still owe on your loan. Between the amount of your insurance deductible and the loss from this financial shortfall or “gap,” you can be left owing literally thousands upon thousands of dollars.

"But I have full coverage!" you say? Well full coverage actually means types of liability. It doesnt mean they will pay whatever you owe.

For example take 2 people. They both bought a brand new Corvette put one owed more on their trade in than it was worth and put zero down. The other had equity in their trade in and put down $5,000 on top. Both bought the same car and if it was totaled is it far to over pay the person who had a higher payoff?

They base it on replacement value, what the insurance company can get the car for. This is less than what you could have sold it for but more than what a dealer would have taken it in on trade.

But for the one that owes so much because of their trade in and putting zero down,the replacement amount that the insurance company will settle for is considerably less and will leave a gap(as much as $15,000 from our experience)that will choke a horse and at least be a painful memory of what NOT having gap insurance will cause.

An example? one person bought a new car like we just described and in 10 months had it stolen. She ended up owing $6000 more than her "full coverage" policy would pay. She ended up with geting the same new car but her payment was $130 a month MORE!

Gap insurance runs a "one time" fee of $300 or less. On a 5 year loan that breaks down to just $50 a year? Make sure its not a limited policy only covering "up to" a certain amount, there are plenty of companies that have better coverage for the same price.

So for a fraction of what they do for you they cover like nothing you've seen before!

Click here to get one today! [more]