Umbrella Insurance Overview
Homeowner’s insurance and car insurance is highly recommended. But in some situations, those policies might not provide enough coverage. The purpose of umbrella insurance is to provide the extra coverage that you need. Umbrella policies are usually available up to $5 million.
How Umbrella Coverage Works
Umbrella coverage extends the limits of your existing liability coverage. It’s not a standalone policy. Instead, it works together with other policies that have liability coverage. Examples include car insurance, homeowner’s insurance, motorcycle insurance, boat, and landlord insurance.
Umbrella insurance is pretty straightforward. Imagine that you were in an accident that caused $50,000 worth of injuries. Your car insurance policy has a $20,000 liability limit. That means you’re responsible for the remaining $30,000. But with umbrella insurance, that $30,000 would be covered.
In addition to bodily harm, umbrella coverage will help in several situations. It can help pay expenses concerning lawsuits, injuries caused by your pet, injuries that a visitor sustains on your property, and damage to someone else’s personal property.
Considering Umbrella Coverage
Umbrella coverage isn’t a requirement. But it’s a smart idea if you have valuable assets to protect. If you ever face a lawsuit and are found liable for damages, then your assets could be at risk. So umbrella insurance is something that anyone can consider.
A simple umbrella policy can add a significant amount of coverage to your existing policies. It’s often cheaper to buy umbrella coverage instead of raising the limits of your existing policies.