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Umbrella Insurance

The 411 on Umbrella Insurance

Umbrella insurance is designed to provide liability coverage over and above what the policy limits are with your car or homeowners’ insurance coverage should you be sued for one reason or another. It gives the policyholder a level of insurance coverage that kicks in after the limits of the normally policy have been exceeded.

If you are the owner of one or more motor vehicles and a home, you’ll be smart to seriously consider good umbrella insurance coverage. It’s relatively inexpensive and it will save you from potential financial ruin should someone be injured on or in your property.

If you purchase umbrella insurance, your coverage generally kicks in when your traditional homeowner or auto liability policy limits are fully used. The norm for an umbrella policy is $1 million in coverage, but additional coverage can be bought that well exceeds that amount. Before you can buy umbrella coverage, you are mandated to already have maximum liability insurance on your other, existing policies. (Normally $250,000 for homeowner coverage and $300,000 for auto.)

In some ways, umbrella coverage is more comprehensive than normal liability coverage. Most umbrella policies will protect the policyholder from lawsuits that can even include the idea of false arrest, libel, slander and other various issues. This coverage will often cover attorney fees that go beyond the normal policy limits.

The more assets one has, the more coverage one will generally need. If you were at fault for a major car accident and you were deemed responsible for $500,000 in damages but had only $300,000 of coverage, you would be encumbered with the extra $200,000 out-of-pocket. Your personal assets could be financially evaporated. Having a $1 million umbrella policy will likely only be around $200 per annum, which, when considering the significant level of coverage is quite reasonable. And, what one can’t put a price is the incredible peace of mind many feel when covered. And, the more protection purchased, the less expensive it is relatively speaking.

Those with considerable assets are wise in protecting has been earned over the years. With an affordable umbrella policy, you can rest assured that your assets are safeguarded.