How Umbrella Insurance Helps
Umbrella coverage allows a person to obtain liability protection over and above the policy limits of a standard auto or homeowners insurance plan. If your existing liability coverage is not up to fully providing for many injury damage claims, (should you be at fault, of course), whether due to a motor vehicle crash or some type of a mishap in your home, etc., then good umbrella insurance coverage can be the key to averting a potential financial disaster.
Keep in mind that you do not need to be extraordinarily affluent to enjoy the benefits of an umbrella insurance policy. Simply owning a home and being the head of the household are enough to validate buying this extra added protection. You might one day fall asleep at the wheel and consequently cause a crash or, perhaps, you may see a friend slip on your wet kitchen floor and then break his or her hip. Whatever the case may be, without proper coverage everything you own and all your monetary assets can therefore be in jeopardy. Normally, the usual auto or homeowners’ insurance will compensate for the initial $300,000 of expenses incurred. The obvious problem is that you will be liable for any dollar amount that exceeds that policy limit.
In addition to what is described above, good umbrella insurance coverage will provide protection for the gaps in one’s current homeowners’ or auto insurance coverage. The following are some cases in which Umbrella Coverage can help in a big way:
• Slander & Defamation
• Malicious Prosecution
• False arrest & imprisonment
• Mental Anguish
Facing a lawsuit, you will no doubt need to come up with substantial funds for legal costs. (This is true even if you prevail in the lawsuit!) However, when having an umbrella policy, the provider of the policyholder can help in the appointment of a legal team on your behalf along with compensation for such expenses as court costs and for legal representation too. If you are found to be guilty and there is a judgment made against you for a substantial sum, umbrella coverage will help protect you with compensation for judgments that exceed your standard coverage.
Umbrella policies generally come in million-dollar increments. Depending on one’s history, the first million dollars of umbrella coverage will usually equal a $300 annual premium. Each additional $1 million of coverage will cost another $100 or so.
Talk to your insurance professional today for more details.