You may have heard the term “umbrella insurance” before, but may not have understood its definition. What is umbrella insurance, exactly? When would a person need it? When it comes to being financially responsible for the benefit of yourself and your loved ones, you’ll want this type of coverage to protect your established assets and financial future.
What is Umbrella Insurance?
This type of coverage can best be thought of as a secondary form of insurance that requires a primary policy to first pay out claims before umbrella coverage goes into effect. Umbrella insurance is an excess liability policy that can go beyond the limits of your primary car, watercraft, homeowners, and other insurances. It’s really designed to give you added liability protection against things like claims and lawsuits that may rise against you. Once the amount of money in a primary insurance policy is paid out, the umbrella insurance then kicks in with its coverage.
What is Covered, and Who Can Benefit?
Specifically, what is covered are the costs for damages and associated legal defense if you get sued. Anyone can benefit from this type of protection from the unexpected. Those who have assets that have built up stand to lose significant amount of money in the event of a lawsuit, so those who have established assets are at significant risk of financial ruin in the event of a lawsuit.
However, this is not to say that those who have no assets are not at risk – it happens all the time: Courts still award benefits to a third party because of damages, even if the other party has no money or assets. Umbrella insurance can cost as little as $100 per year for $1 million in coverage! Higher benefit amounts are inexpensive, too, especially when compared to the value of the coverage. It’s worth shopping around and getting a few quotes before you settle on a specific company or plan for your umbrella insurance. Some companies can double (or even triple) coverage on your policy and may not double or triple the premium costs – but some do not. It’s worth your time to do some due diligence to help you make an informed decision and reap the most benefit from your policy.
How Much Coverage Do I Need?
In order to figure out how much umbrella insurance to get, you’ll need to figure out the risks you may face, the potential loss of any future income that may happen, and the value of your assets. You’ll also want to compare the “fine print” on any restrictions and requirements for benefits and minimum underlying insurance.
For a free no-obligation quote for umbrella insurance or any other type of insurance, Summit Insurance Advisors can shop for insurance so you don’t have to! Get your free insurance quote online now.