List Your Business
 
 
     

Umbrella Insurance Policies: What Are They And Should You Have One?

If it’s raining outside and you have a raincoat with a hood on, that’s pretty good.  It will keep your clothing dry for the most part.  Your pants and shoes might get wet and your face might get a little wet.  If you want to stay drier, add an umbrella for more protection.  That’s what an umbrella policy does for you, as well.  It provides that additional layer of protection above and beyond the limits of liability covered under both your auto and homeowners’ insurance policies. 

An umbrella policy protects you and others covered against the financial burdens of a catastrophic claim, lawsuit or judgment by:
•    Providing expanded liability coverage over and above your primary liability protection
•    Increasing the amount of coverage beyond that of your auto insurance and homeowners’/renters’ insurance

The myths about umbrella coverage

•    It is just for the rich.
•    It is too complicated to coordinate with your existing insurance.
•    The premiums are too expensive.

All of these myths are incorrect. Umbrella liability is relatively affordable, can be easily coordinated with your existing insurance policies and by no means is it just for the well to do. High coverage limits such as those provided by an umbrella policy, can be very important if you have significant assets to protect. (A home, a business, etc.)  But your assets may be modest in size and need similar protection.  It can be less expensive than merely raising the limits on each of your individual policies separately, and can sometimes be issued in higher amounts than your auto or homeowners’ insurance company is willing to provide.  You will still need auto and homeowners’ or renters’ coverage, as insurance companies require certain minimum levels of underlying coverage before they will consider issuing an umbrella policy.

Example
Assume you have an automobile liability insurance policy providing $100,000 /$300,000 in coverage – the first figure representing the maximum liability to one person injured and the second figure, the maximum liability for all persons injured. Your 17-year old son is at fault for an accident and seriously injures someone – a few days of hospitalization and some surgery can easily eat up that $100,000 limit. An umbrella policy pays for any liability you incur above that $100,000 limit up to the limits of your umbrella coverage. Without umbrella coverage, you may be personally responsible for covering the injured person’s medical bills over and above your policy limits. An umbrella policy provides you with an additional layer of protection that would pay those added amounts, up to the limit of the umbrella coverage.  And it is less expensive than you might think.

Generally speaking, anyone with over $100,000 in assets may want to consider purchasing umbrella coverage. It is usually not expensive as it is triggered only after primary levels of insurance have been exhausted – therefore the insurance company views the risk of it being utilized as far lower, knowing that the primary insurance company will also be handling nearly all of the legal work if there is a claim.  Do shop around for the best rates.

Some examples of where umbrella coverage often comes into play:
•    An auto accident in which you are sued under your auto insurance policy.
•    Your neighbor slips and falls on your property, and you are sued under your homeowners’ or renters’ insurance.
•    A natural disaster in which another person's property is damaged by your tree crashing down on their vehicle or home.

Stand-alone umbrella policies

If umbrella coverage is for you, check with your insurance carrier and see if they offer it at a reasonable price.  If you cannot get a good deal on umbrella coverage from your current insurance company, it is important to know that many insurers offer "stand-alone" umbrella policies where the insurance company that issues the umbrella policy doesn’t require you to also insure your home and car with the same insurance company. You’ll still need that basic underlying policy even if it is with another carrier, and the Umbrella limits will go on top of those. So if, for example, you own real estate or autos located in various states, this type of policy can insure them all and you do not have to change your current insurance companies.

From www.autoinsurancetips.com

This content was sponsored by:

26038 Woodward Ave.
Royal Oak, MI 48067
(248) 721-9101
Crescent Movers
6321 N. Cicero Ave, Unit A
Chicago, IL 60646
Johnson Construction Company LLC
1707 N West St.
Lima, OH 45801
Turtle Roofing
8404 Sterling St #1
Irving, TX 75063
Health Insurance Plus More
Commerce Township, MI
Commerce Township, MI 48382
Drytech Restoration Services
80 Central Ave.
Spring City, PA 19475
Is anyone who drives my car covered?
What are the best liability policy limits?
What is the difference between comprehensive and collision?
Why does my insurance cost more than my agent said it would?
How does my driving record affect my insurance premium?
Why is it harder to get insurance if drivers in my household have bad driving records?
8 Reasons you should buy life insurance
The role of life insurance in long-term planning for your special needs child
What is the difference between Whole Life Insurance & Term Life Insurance
Homeowners insurance and your home buying budget
Do you have enough home insurance coverage for your condo?
Earthquake Insurance: An Invaluable Asset in California
Trampolines -- Balancing the rewards and risk to your home insurance
Cheap Auto Insurance Quotes - Tips For Getting The Lowest Rate
Finding auto insurance quotes online is easy, but finding the cheapest auto insurance rates can be more of a challenge. To get the lowest quotes, follow these tips to help you find ways to trim possibly hundreds off your auto insurance quotes.
Car Insurance Comparison: 4 Important Things to Consider
You've been looking for insurance for your car because it is a state requirement before hitting your precious one on the road. Aside from that, insuring your vehicle will save you from a lot of trouble.
4 Auto Insurance Quote Tips
The purpose of this article is to look at tips on getting an auto insurance quote. We are going to specifically talk about using the Internet as a way to do that. Even if you are not real familiar with how to use the Internet you will be surprised at how easy it is to get quotes on auto insurance.
Average Cost of Health Insurance
The field of health insurance is a bit complex, as there are multiple policy providers of insurance. The three principle providers of insurance policies include, the employers, public or state or Federal bodies, and lastly the private sector insurance policies.
Does a Learners' Permit Require Auto Insurance?: Whether Parents Should Add Student Drivers to their Insurance Policy
Vacation Rental Car Insurance: Should I Buy Coverage from the Rental Agency?
Because it's the law to drive an insured car, you won't be able to drive off the lot without some sort of coverage in place.
 

In your area: