The Benefits of an Umbrella Policy
Unexpected events can happen quickly, and while many accidents involving your auto or other properties are covered by insurance, a claim that goes above your coverage amount is always possible.
For this reason, many drivers and homeowners choose umbrella insurance, which helps you protect your financial security from lawsuits and liability claims. This is a very helpful coverage that can be beneficial for many people, but, unfortunately, there is a common belief that umbrella insurance is only for the wealthy.
Let’s talk about umbrella insurance, so you can see whether it is a good choice for you.
What is Umbrella Insurance?
An umbrella insurance policy is designed to protect you from a liability claim above and beyond what your homeowner’s or automotive insurance already covers. Essentially, it is an added protection against lawsuits that could threaten your financial security.
For example, if you are responsible for an auto accident that results in $500,000 of damages and medical bills, your existing auto insurance may only cover $300,000. Unfortunately, you will be left to cover the rest of the bill. Do you have $200,000 to spare? The answer for most people is no, meaning your assets, including your home, vehicles, savings accounts, and any other valuables, could be seized.
Your future financial stability could be in jeopardy, but this is where an umbrella policy kicks in. These policies are designed to cover the extra amount, creating a protective umbrella for your financial future.
Who Needs Umbrella Insurance?
There is a common thought that only wealthy individuals need umbrella insurance, but that’s not actually the case. In fact, wealthy individuals may be able to get by without an umbrella policy, as their savings and assets could cover larger claims without harming their financial stability.
It’s actually any home and auto owners in the middle-income range that truly need this coverage. These are the people who have worked hard and made financially responsible decisions for years, but could see everything crumble in the event of a major claim against them. Their risk levels are higher, making an umbrella policy more important.
A Versatile Insurance
A major advantage of umbrella insurance (depending on which policy you choose, of course) is the versatility. As the name suggests, these policies are designed to protect your financial nest egg from a wide range of threats, including automotive accidents, injuries that occur on your property, claims involving watercraft, and accidents that may occur in other parts of the world. They can even protect you from libel, slander, and defamation-of-character cases. These policies help not only with the cost of claims, but they can also cover attorney fees, court costs, and other expenses that accumulate over the course of a legal case.
While not everyone needs umbrella insurance, there are many affordable options that you can consider protecting your home, savings, automobiles, and other financial assets.
Regardless of your situation, you should at least talk with one of our agents\ who can help you understand the costs and benefits of an umbrella insurance policy.