Umbrella Insurance Policy Basics
With all of the insurance policies that you already have, it can be easy to assume that you have enough coverage for any situation that may occur. However, there are many accidents that can occur which may exceed the coverage of your other insurance policies. Investing in a personal umbrella insurance policy is the best way to ensure that you are protected from any peril.
An umbrella insurance policy will provide extra liability coverage that goes beyond your other personal insurance policies. The liability coverage of an umbrella policy will not “kick in” until the liability portions of all your other policies have run out to ensure that you are not financially devastated, just because of one accident. An umbrella insurance policy will also provide coverage for situations that are not covered by your other insurance policies, including slander, libel, and false arrest.
Personal umbrella insurance policies start at $1 million in coverage, and then increase in million dollar increments. All of the coverage from an umbrella insurance policy is very affordable, typically less than $500 for an entire year. While $1 million may seem like much more coverage than you will ever need, it probably is not. Consider if you caused a car crash and the medical bills for you and the other driver is $500,000, which is much more than the $300,000 limit on your auto insurance policy. If you do not have an umbrella insurance policy, you will be left paying for the other $200,000 worth of damages out of your own pocket. However, if you do have a personal umbrella insurance policy, you will have enough coverage to ensure that you are not financially devastated due to one accident.