a rainy day
Umbrella policies expand your coverage
Umbrella policies are available through Costco Insur-
ACCIDENTS—and the lawsuits that sometimes limits be at least a certain amount, such as $200,000
follow them—can be as unpredictable as a flash to $300,000.
flood. The real trick in dealing with them is to sur-
round yourself with enough insurance coverage to Umbrellas expand your coverage
weather the storm. When you buy a personal-liability umbrella,
If you’re on the unfortunate end of a lawsuit, you’re getting more than just higher liability limits.
frivolous or otherwise, it’s important to have insur- You’re also buying broader coverage in case you’re
ance to cover your legal liability. You may find the sued. The insurer selling the umbrella policy agrees
additional protection you need from a personal- to cover you if you cause bodily injury, property
liability policy. damage or personal injury. (Generally, personal
Umbrella policies, as they’re also known, sup- injury encompasses false arrest, false imprisonment,
plement the liability coverage you already have malicious prosecution, defamation, invasion ofpri-
through your home and auto insurance and provide vacy, wrongful entry or eviction.) The personal-
an extra layer of protection. Umbrella policies aren’t injury protection offers coverage that may not be
just for the wealthy—they’re for anyone who has found in your auto and homeowner’s policies.
assets that might be at risk if they are responsible for Protection against claims and lawsuits does
a serious accident. more than simply pay for the damages. Even if a law-
If you don’t have enough liability coverage to suit is frivolous, you still face the expense of defend-
resolve a claim or a lawsuit, the person bringing the ing yourself. Your liability coverage pays for lawyer
action might go after your home or your other fees and defense costs of covered claims.
assets to pay for damage. Umbrella policies cover Although you can’t protect yourself against every
damage claims that you, your dependents or even possible claim or lawsuit and there are exclusions in
your pets may cause. umbrella policies, just as there are in every insurance
Insure.com, an online consumer insurance policy, the bottom line is your insurance dollars go
information service, provides the following umbrella farther with an umbrella.
Do you need an umbrella policy?
How it works Start by analyzing your
Umbrella policies kick in after the liability insur- risk of being sued and the
ance in your homeowner’s or auto policy runs out. assets you have at risk.
For example, if you have a home insurance policy Perhaps your family has a
with liability coverage of $300,000, the umbrella dog, a swimming pool or
policy will pay claims above that amount up to the swing in the backyard that
limit selected. could pose a danger. If you
Most of the risk is assumed under the primary have frequent visitors to your
auto or home policy, which is why a personal-liabil- property, there’s a risk of acci-
ity umbrella is so inexpensive. You can usually pur- dental falls.
chase a $1 million or larger umbrella policy for As with any type of in-
around $200 a year. surance, you don’t want to
Many companies won’t sell you an umbrella buy unnecessary coverage.
policy unless both your auto and home insurance It’s best to check with an
coverage is with them. In addition, your insurer may insurance professional about
stipulate that your auto or homeowner’s liability your situation. C
ance Agency Inc. and the
American Express Property
Casualty companies. Call
toll-free 1-888-404-5365 (
reference number 8A2) to talk
with a licensed insurance
Auto and home insurance
is also available through
Costco Insurance Agency
Inc. and the American
Express Property Casualty
companies. Just call the
number above, or go online
at costco.com, click on
“Services,” then click on
“Auto & Home Insurance.”
By switching auto insurance, you might save
enough to pay for an
umbrella policy (see table,
below). Executive Members
can also receive free road-side assistance for vehicles
covered through the auto
Service not available in all states.
Insurance underwritten by AMEX
Assurance Company or IDS Property
Casualty Insurance Company, De Pere, WI.
Cover your cost
Average annual savings for members who switched their insurance through Costco $468
Average annual cost of $1 million
Members save enough on average to cover the cost
of a $1 million umbrella policy.
Data in chart represents information provided by Costco members who
became new auto insurance policyholders with the American Express
Property Casualty companies between 12/1/04 and 5/31/05. Premium
shown is for a typical $1 million comprehensive personal-liability umbrella
policy. Individual savings and experience may vary based upon a variety of
factors, including but not limited to driving experience, type of automobile,
number of automobiles or homes and any recreational vehicles insured.