With lawsuits at an all-time high, many people are concerned that they have an insufficient amount of liability insurance particularly. Umbrella policies are often the ideal solution. Learn more about umbrella insurance and the extra protection it can offer.
What is an Umbrella Policy & Who Does it Covers?
Umbrella policies allow you to have additional liability insurance beyond what you have on your regular homeowner’s, auto, business or motorcycle policy. Basically, umbrella policies can be purchased as add-ons for any policy you have that includes liability insurance as part of the coverage. The policy covers the person or business that purchased the insurance policy. It can be helpful in paying for legal expenses, property damage, medical expenses and lawsuit compensations.
How Umbrella Policies Works
Unlike other insurance policies that can be purchased independently, umbrella policies can only be purchased once you already have a regular policy in force for a designated dollar amount. Umbrella policies can be lifesavers for those that are sued for an amount larger than the liability coverage on their regular policy. For instance, you have $100,000 liability coverage on your auto policy plus an umbrella policy for $200,000. If you’re sued for $150,000, the first $100,000 will come from your regular policy and the additional $50,000 will come from the umbrella policy.
Types of Coverage
Although most umbrella policies are purchased by businesses, individuals can and do also purchase umbrella policies. They may get them for additional coverage for personal injuries, property damage, landlord insurance and homeowner’s insurance. Policy holders don’t have to have this in force all the time. They have the option of buying a policy if they think they may need it during a certain time period.
As much as we don’t like to think about being sued, it can happen. The main benefit to umbrella insurance policies is that they can offer security and peace of mind knowing that if that does happen, you won’t lose everything you’ve spent your life earning. Umbrella policies, which are relatively cheap, can take care of you.