Umbrella Insurance Policies
From LoveToKnow Insurance
Umbrella insurance policies provide supplemental insurance coverage above and beyond the coverage provided by other types of insurance policies. If you ever find yourself at the wrong end of a lawsuit, this type of insurance policy could save you from financial disaster.
About Umbrella Insurance Policies
Automobile, homeowners, renter's, and other types of insurance policies provide only a limited amount of liability coverage. Though coverage amounts can vary, the typical insurance policy provides liability coverage against lawsuites of only $300,000 to $500,000 per accident.
While this may seem like a lot, it can be eaten up quickly by medical bills and lost wages. If an unfortunate accident occurs and you become involved in a lawsuit, you may not have the liability coverage needed to pay out the amount awarded to the injuried parties. If your insurance can't cover the payout, you will be expected to do it out of your own pocket.
This is why umbrella insurance policies were created. Umbrella insurance provides additional liability coverage beyond the coverage offered under your current policies (homeowner's, renter's, auto, watercraft, etc.). This additional protection is designed to kick in when and if the liability on other insurance policies has been exhausted.
Buying Umbrella Insurance Policies
There are different types umbrella insurance policies available. When shopping, it is important to determine exactly what type of coverage you need and what type of coverage is being offered.
For example, some policies have specific exclusions. You will want to make sure the activities that you are involved in are covered under the policy. Activities that are not covered under basic policies are especially important to insure. Be sure to read over your policy carefully and ask specific questions before automatically assuming that you are covered.
In addition to policy features, you will also need to determine exactly how much coverage you should have. In a recent interview with LoveToKnow Insurance, author and insurance expert Jack Hunglemann recommended consumers buy at least $1 million in coverage, and if uncertain, buy at least $1 million more in coverage than you think you need.
Getting a Quote
As with any other type of insurance, it is a good idea to get several quotes when shopping for umbrella coverage. Though most umbrella insurance policies are known for having low annual premiums ($100 to $400), they can range in cost depending on where they are purchased.
If you're not sure where to begin your search for a quote, here are several companies that offer umbrella insurance policies:
A Final Note
Because we live in such a litigious society, it makes good financial sense to have additional protection beyond the coverage offered by typical insurance policies. There is no telling when something unfortunate will happen. Umbrella insurance policies can give you the level of protection you need to ensure that you will not lose your money and assets in the event of a lawsuit.
Although it is true that umbrella insurance offers coverage that you may never need, it can protect you like no other insurance policy. And, because premiums are so low for millions in coverage, umbrella insurance is actually one of the best deals in the insurance industry.
This page has been accessed 736 times. This page was last modified 01:28, 9 October 2006.
© 2006-2008 LoveToKnow Corp.
