What is Umbrella Insurance?
Umbrella coverage is in the family of liability insurance coverage. It can be purchased as a supplement to home, auto, or other basic liability policies. This allows you to get much more coverage than you might with a basic policy. The purpose of this coverage is to provide further asset protection for accidents, emergencies, and unforeseen events. This insurance can pay for things like:
-Bodily injury and/or property damage expenses beyond liability limits
-Legal fees and lawsuit settlements
-False arrest, libel, slander, and other legal cases, depending on the policy
Who Needs It?
Anyone who needs insurance protection that goes above and beyond what is offered by their standard home, auto, or other personal or commercial insurance policy can benefit from this coverage. For personal and professional use alike, anyone who wants to protect their assets from financial liability, lawsuits, or other risks can benefit from umbrella coverage.
How Does Umbrella Coverage Work?
This insurance will come to bat for you when you need to pay for damages, lawsuit expenses, legal fees, and other costs related to an accident or emergency that has exhausted or gone beyond the limits of your basic liability coverage. Once your standard insurance runs out, the umbrella coverage kicks in and takes care of paying the necessary damages or settlement costs. How much they will pay depends on how much coverage you purchase, and there may still be some out-of-pocket expense if you don’t have enough extra insurance.
Umbrella policies are fairly standard. You will be asked to choose a coverage level (dollar amount) that you want to have beyond your basic liability coverage. Then, if there are any specific liability riders, options, or other coverage factors to consider, you will be asked to choose those parameters, as well. This is fairly affordable as far as insurance goes, so always get more than you think you’ll need just to be safe. Usually, you can double your coverage for just a few dollars more a month.
Benefits of Umbrella Coverage
The biggest benefit of umbrella insurance is that it relieves you of any financial responsibility that might remain after your insurance runs out. Whether or not you are found guilty of causing an accident or injury, you may still be held responsible for damages, legal fees, or other expenses that your basic insurance policy can’t cover. Plus, since it can be purchased commercially, it can also protect your professional reputation, your business, and your financial future in ways that you might not even imagine.