Does Your Umbrella Policy Cover Underinsured/Uninsured Claims?

Earlier this week I wrote about insurance coverage and how important it is. I recently received an inquiry about umbrella policies. Umbrella policies are large liability policies ($1million dollars or more) written to cover individuals or businesses. In most cases, these policies are less expensive than a comparable liability limit on your automobile or homeowner policy. In most cases, the insurer will also require that you carry a certain amount of liability coverage on your automobile and homeowner or renter's policy.

Umbrella policies are a good thing and I highly recommend them. However, most umbrella policies DO NOT cover underinsured or uninsured motorist claims. Therefore, it is still necessary to carry a large underinsured or uninsured motorist coverage liability limit. Ask your agent if you existing umbrella policy or the one your are contemplating, covers uninsured motorist or underinsured motorist claims. If the agent says they are covered, make him/her show you the policy itself to back up their opinion.