Umbrella Insurance
Introduction to Umbrella Insurance
Many are not aware that liability limits on homeowners and car insurance may not be sufficient if some kind of tragic loss occur. Umbrella coverage is a unique type of coverage that extends extra liability insurance coverage that goes above and beyond the policy limits of a typical car or homeowners’ insurance plan. Umbrella insurance, inherent by its name, creates an “umbrella” that protects you from your policies’ deficiencies, extending existing coverage to up to $5 million. This protection improves your existing coverage to more fully protect your assets from certain legal claims. Umbrella coverage extends the protections of your current insurance plans by boosting liability coverage. An umbrella policy can greatly bolster the liability coverage of many kinds of insurance policies such as auto and homeowner’s insurance and motorcycle, boat and RV insurance, even landlord insurance.
Without adequate coverage, everything you own could be subject to liquidation. Often, the typical car or home insurance will cover the initial $300,000 of loss. However, one remains personally liable for any dollar amounts beyond these limits. Having this kind of coverage can mean the difference between financial well-being and potential bankruptcy. Umbrella plans normally provide coverage in $1 million increments. Depending on various factors, the first $1 million of coverage usually cost just $300 per year or so. Each additional $1 million of coverage will likely require another $100. Umbrella policies can be utilized in a myriad of situations in which you face legal liability, such as lawsuits, physical damage to another person’s property or injuries to others caused by the policyholder. If you’re a pet owner, for example, injuries to another caused by your dog are also covered. Also, this protection can help with incidences of injuries that happen on your property, such as a visitor falling and breaking a bone. While umbrella coverage isn’t a legal necessity, it can be a smart investment if you wish to protect your assets against legal claims. Without sufficient liability coverage, your home, car, and retirement may all be endangered. Additionally, good umbrella insurance can safeguard one from issues that are not under the purview of normal homeowner or auto insurance plans, for instance, slander or defamation claims, false arrest or imprisonment, malicious prosecution and those who cause mental anguish. Regardless of the assumptions of whom this kind of coverage benefits, one does not have to be wealthy to utilize the benefits of a good umbrella insurance plan. A basic umbrella policy can supplement existing protections with millions in liability coverage at a cost that’s generally much lower than increasing the limits on the individual existing policies. An umbrella policy can achieve much more at a lower cost. By carrying an umbrella policy, you can enjoy peace of mind in knowing that you will have legal support in fighting legal claims while, at the same time, the insurer can also payout for such things as court costs and so much more.
