Safeguard Your Finances From Unpredictable Storms
When it rains, it pours. The same is true when an accident happens. Sometimes, things really do go from bad to worse, especially if you land yourself a legal situation. If you were found negligent or liable for someone else’s bodily injury or death, would you have enough insurance to protect your assets? It’s not a question we like to ask ourselves, but it’s important that we do to safeguard our finances from unforeseen disasters. Fortunately, umbrella insurance can help.
What is Umbrella Insurance?
Umbrella insurance is a stand-alone liability policy that provides an additional limit of liability over and above your underlying liability limits that are already on your homeowners and auto insurance policies. If a disaster does occur, your umbrella coverage will extend coverage to protect your assets.
Remember that it only takes one large accident for you to exhaust your liability limits on your auto, home, watercraft, and motorcycle insurance policies. With the rising cost of medical expenses and expensive vehicles, just about everyone can benefit from umbrella insurance.
Umbrella Insurance in Action
To get a better sense of what umbrella insurance is and how it would work in a real-life situation, it helps to think about it in action.
Say you’re held liable for causing a car accident with multiple vehicles, and the cost to cover the damages and injuries is $850,000. However, the liability limits on your auto insurance policy are only $300,000. In this case, your insurance would pay only $300,000 for the entire accident, leaving you to pay the remaining $550,000 out of your own pocket.
With an umbrella policy, however, you could extend your liability limits beyond the maximum provided by your underlying policies. In this case, an umbrella policy would provide liability limits above the $300,000 limit of your car insurance, up to the limit you choose for your umbrella policy (typically anywhere from $1 million up to $5 million in coverage). In other words, you wouldn’t be left paying the remaining $550,000.
There are many situations in which an umbrella policy can come in handy, such as:
- Your dog bites a neighbors child
- There’s a fire at your condo spreads to other units
- There’s an accident at your rental property
The Cost of Umbrella Insurance
One of the aspects that makes umbrella insurance so appealing is that the cost is generally very low. The cost of your policy will depend on the number of cars and homes you need it to overlay, but typically the cost is pennies on the dollar and all the risk is on the insurance company.
Ready to get started with an umbrella insurance quote? Contact to our trusted team members at Greak Park Insurance today for more information.