Today the House passed (and President Bush signed into law) the Emergency Economic Stabilization Act of 2008 (aka the “Bailout Bill”). One important feature of this new law is an increase in FDIC insurance from $100,000 to $250,000 per depositor.

Though only large depositors, such as small businesses and consumers with high account balances, will be impacted directly, a significant benefit of this legislation is that it will reduce the likelihood of a run on a bank, as we have seen in recent days at Wachovia and Washington Mutual. Such runs, combined with the banks’ deteriorating capital positions, contributed to their being sold at distressed prices to avoid destabilizing the country’s financial sector.

You can obtain coverage higher than $250,000 by creating separately titled accounts. For example, you could have an account in your own name and an account in your wife’s name. Each account would be insured up to $250,000 providing up to $500,000 of coverage. Additionally, accounts or certificates of deposit can be opened at multiple banks, with each being insured up to $250,000.

The FDIC provides a calculator to help you determine whether your deposits are within the insurance coverage limits here.

The increase in coverage will expire in December 2009 unless Congress acts to extend it before the end of next year.