Umbrella Insurance – Protecting You Beyond Your Basic Coverage

When it comes to insurance, most people think about their auto, home, or health insurance policies. However, there is another type of insurance that can provide additional coverage called umbrella insurance. An umbrella policy can protect you beyond your basic coverage and provide you with peace of mind in case of unexpected events. In this article, we will explain what umbrella insurance is, how it works, and why you might need it.

What is Umbrella Insurance?

Umbrella insurance, also known as excess liability insurance, is a type of insurance that provides additional coverage beyond your primary insurance policies. It is designed to protect you from major liability claims and lawsuits that may exceed the limits of your basic insurance policies.

An umbrella policy can provide coverage for a variety of situations, such as:

• Bodily injury or property damage caused by you or a family member
• Legal defense fees in case of a lawsuit
• Liability claims against you that are not covered by your basic policies, such as libel or slander

Umbrella insurance is usually sold in increments of one million dollars and can provide coverage up to five million dollars or more depending on the insurance provider.

How Does Umbrella Insurance Work?

Umbrella insurance works by providing an additional layer of protection beyond your primary policies. For example, if you are involved in a car accident and the damages exceed the limits of your auto insurance policy, your umbrella policy can provide coverage for the remaining amount up to the limit of your umbrella policy.

Umbrella insurance can also provide coverage for situations that are not covered by your basic policies. For example, if someone sues you for libel or slander and your homeowner’s insurance policy does not provide coverage for this type of claim, your umbrella policy can provide coverage up to the limit of the policy.

Why Do You Need Umbrella Insurance?

Umbrella insurance is not required by law, but it can provide you with additional protection and peace of mind in case of unexpected events. Here are some reasons why you might need umbrella insurance:

You Have Assets to Protect

If you have assets such as a house, car, or savings, and you are found liable for damages that exceed the limits of your basic policies, you could be at risk of losing your assets. An umbrella policy can provide protection in case of major liability claims and provide you with peace of mind.

You Have a High-Risk Occupation or Lifestyle

If you have a high-risk occupation or lifestyle, you are more likely to be sued. Examples of high-risk occupations or lifestyles include doctors, lawyers, landlords, and athletes. An umbrella policy can provide additional protection in case of lawsuits or liability claims.

You Have Teenage Drivers

If you have teenage drivers, they are more likely to be involved in car accidents. An umbrella policy can provide additional coverage in case of damages or injuries that exceed the limits of your auto insurance policy.

FAQs

The Bottom Line

Umbrella insurance can provide additional protection and peace of mind beyond your basic insurance policies. Whether you have assets to protect, a high-risk occupation or lifestyle, or teenage drivers, an umbrella policy can provide you with the coverage you need in case of unexpected events.

It’s important to review your insurance coverage regularly and consider purchasing an umbrella policy if you think you may need additional protection. Consult with an insurance agent to determine the best policy for your needs and budget.