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4/22/2011 - What does an umbrella policy do?

An umbrella policy can create an additional shield for a policyholder’s assets.

Due to rising medical expenses, auto insurance fraud and premiums creeping upward in most states, a standard auto or home insurance policy often isn't enough. As such, an umbrella insurance policy can protect people from financial jeopardy should an accident exceed a policy's limit.

Similar to how a rain umbrella shields people from getting wet, umbrella insurance shields policyholders' assets, as their future income will not have to be garnished if a policy falls short of the funds needed for coverage.

It also protects policyholders from being individually sued, as Amy Danise, senior managing editor for, tells the USA Today that society has become increasingly litigious.

"You're going to need to look at an umbrella policy that covers homeowners and your auto," Danise told the paper.

Fortunately, umbrella insurance policies are not cost-prohibitive, since they aren't the primary insurance policy and won't be needed as often. It's an additional expense, but as Alexandria, Virginia homeowner Mike Jacobs told the paper, "It's better to have and not need, than need and not have."

To learn more about umbrella coverage from Selective, please click here .

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