The definition of an Umbrella Policy is “pure liability coverage over and above the coverage afforded by the regular policy, and is sold in increments of one million dollars. The term umbrella is used because it covers liability claims from all policies underneath it, such as auto and homeowners insurance policies.

For example, if you have an auto insurance policy with liability limits of $500,000 and a homeowner’s insurance policy with a limit of $300,000, then with a million dollar umbrella, your limits become in effect, $1,500,000 on an auto liability claim and $1,300,000 on a homeowner’s liability claim”.

This past year we saw a rise in the cost of almost everything.  Insurance is no exception.  It is not something any of us want to skimp on, but there are ways to lower our premiums without underinsuring our most important assets.

Raise your deductible as high as you can.  The higher your deductible, the more money you can save on your premiums. Take it anywhere from a $250 deductible to a $2,500 deductible.  With the money you will save monthly, place it in a savings account until you reach the amount of your deductible.   Keep it in the account collecting interest until you need it.