Roberts Insurance Group Blog
This is a question we get all of the time. I was actually speaking with a Georgia homeowner the other day and this question was brought up. The homeowner said, “I think I need an umbrella policy to make sure my home is fully covered”.
What if I told you that an umbrella policy doesn’t cover your property at all but it does help protect it? I know that is confusing, so let me explain.
What is an Umbrella Policy?
For Georgia homeowners (and business owners), an umbrella policy is an extra layer of liability protection that stacks on top of your underlying policies. So for a homeowner in Georgia, it would stack on top of the liability provided by their home (or renters) policy, auto policy, and toy policies (boat, ATV, golf cart, etc.). For business owners in Georgia, it stacks on top of their underlying commercial auto and general liability policies.
What do I mean by stack on top?
Every auto and home policy has liability coverage built into the policy. For auto insurance in Georgia, the liability coverage starts at $25,000/$50,000/$25,000 and goes up from there. This is the coverage that would pay another party for their bodily injury (medical bills, lost wages, pain and suffering, etc.) or property damage (fixing or replacing their car) if you are at fault for the damage.
For a homeowners policy, the liability coverage generally starts at $100,000 and goes up from there. This would help pay defense costs and settlements if a non-auto accident lawsuit is brought against you or a member of your household.
An umbrella policy will stack on top of the underlying liability for each policy in the household, meaning if the liability coverage on your home or auto policy gets depleted, the umbrella policy will kick in to provide additional protection.
It should be worth noting that the umbrella policy will not pay to rebuild your home or fix your car. It is strictly for liability purposes. So it does help protect your property, income, and other assets from being seized, garnished, or from having a lien applied.
How much coverage can you get and how much does it cost?
Umbrella policies start at $1,000,000 of coverage and go up from there. Some companies will cap out at $2,000,000 per household but many of them will go up to $25,000,000.
Umbrella policies are extremely affordable in Georgia with $1,000,000 policies starting as low as $10 per month for some Georgia homeowners.
What’s the catch?
The only real “catch” is that umbrella policies typically require Georgia homeowners to carry a specific liability limit on the underlying policies. For auto insurance, they typically require $250,000/$500,000 as the underlying requirements for bodily injury liability (this was raised from $100,000/$300,000 over the last several years, so in some cases you could be “grandfathered” in with the $100,000/$300,000 underlying limits).
For homeowners in Georgia, the typical underlying requirement is $300,000 although some companies will allow $100,000 on the underlying homeowner or renters policy.
Who needs an umbrella policy?
There’s not an exact answer to this question but generally speaking, any household making over $100,000 or with more than $250,000 in assets should strongly consider purchasing a liability umbrella policy. You wouldn’t insure your house for less than the cost to replace it, so why would you insure your income or assets for less than they’re worth?
Give us a call today to see if an umbrella policy is right for your household or business!