Trust us, we know there are a lot of insurance terms out there. Perhaps, you’ve heard about umbrella insurance while learning about other forms of liability protection. Let us break it down for you, so you can decide whether or not it’s a type of insurance you need.
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What Is It?
Umbrella insurance is there to offer you peace of mind and security. Essentially, it’s a type of personal liability protection.
The unique thing about umbrella insurance is that it’s not confined to one specific policy. The coverage is not solely for auto insurance. Umbrella insurance acts as additional protection for all of your insurance policies, including home, auto, boat, motorcycle etc.
Why Would I Want It?
If you’re concerned about protecting your assets, you may decide to purchase additional coverage through umbrella insurance.
Liability insurance protects you if you’re at-fault in a collision or if an accident occurs in your home. It may cover you for property damage or injuries of other people involved. If your liability limits are used up after a car accident or other incident, you’d be forced to pay the remaining expenses out of your own wallet.
So what does umbrella insurance do? It covers those expenses so that you’re not left in a bind, without a way to pay. Umbrella insurance would cover the additional costs left over after your limits have been exhausted to cover the remaining medical expenses, property damage or lawsuit fees.
Essentially, umbrella insurance helps you protect your assets. If you were unable to pay the remaining expenses, a lawsuit could occur or others could go after your assets.
Take a Closer Look:
You may be thinking “I already have car insurance. Why would I need anything else?” but let us explain a situation where umbrella insurance may be exactly what you need.
If you’re in a traffic collision with a couple of other vehicles and found at-fault, you—and your auto insurer—will have to pay for the resulting damages. This includes the damage to property, vehicles’ damage and medical expenses. Depending on the severity of the crash, you may find that your auto insurance limits run out. You’re then left to pay the remaining expenses, and if you’re unable to or don’t have the money on hand, you could lose your assets However, if you had umbrella insurance, then the coverage would kick in.
So if the total accident damages and injuries totaled to $400,000 and your auto insurance limits only covered $250,000, then the remaining $150,000 would be covered by the umbrella insurance instead of by you. The same would go for home, boat or motorcycle policies.
Perhaps, you’re comfortable with your insurance policies’ limits or you aren’t concerned about potentially losing your assets. However, if you’re interested in additional protection and security, talk to your insurer today to see about purchasing umbrella insurance.