Because you can’t predict when an accident will happen, insurance is an excellent investment. It can help you pay for unexpected damage to your home or car, and if you have a business, insurance can help cover damages, theft, and personal injury cases.
But insurance can sometimes be difficult to navigate. With all the different types of insurance and different features, it’s easy to get confused and overwhelmed. But while car insurance and home insurance are common and often necessary, umbrella insurance isn’t often discussed. What is it, and why is it necessary?
For more information about umbrella insurance, read on. We’ll discuss what it is, what it covers, and why it’s necessary.
What Is It?
Umbrella insurance is intended to cover what standard insurance policies cannot. While your home or car insurance is useful, it does have a limit. Umbrella insurance can essentially extend the coverage of any of your policies, whether it’s a commercial property policy or a personal auto insurance policy.
Umbrella insurance can offer numerous different coverages, so you can rest easy if you find yourself in a difficult situation. With umbrella insurance, you can protect your assets, yourself, and your finances. And umbrella insurance isn’t just for the average homeowner-it’s also excellent for business owners, landlords, and people of various occupations.
What Does It Cover?
Now you know that umbrella insurance will give you extra coverage, but you may be confused as to what kind of coverage it offers. Umbrella insurance can cover situations like lawsuits, injuries, property damages, and various liability issues. Think of umbrella insurance as an extension of any of your other policies, and it can cover situations like the following.
Umbrella insurance can help further cover vehicle damage in a car accident, and if your pet damages another’s expensive property, it can help cover that incident too. Or, if your child causes accidental damage to someone else’s property or to school property, umbrella insurance can cover what your usual insurance can’t. It can even apply to some instances of theft.
If you’re a business owner or a landlord, umbrella insurance is extremely helpful if your property or establishment is damaged or otherwise harmed by customers, renters, or others. If you have a particularly messy or careless tenant or some teenagers vandalize and damage your store, umbrella insurance will pay out when your regular policy reaches its limit.
If someone is injured on your property and sues you for damages, you can easily find yourself in hot water if your usual insurance can’t cover it all. Umbrella insurance can cover the extra costs, and it can also cover injuries caused by your pet, your property, and other accidents. Umbrella insurance can also apply to medical malpractice lawsuits.
Umbrella insurance can also be an excellent supplement to liability insurance. For example, if you’re in an occupation where bad advice can result in a loss or some other problem for your clients or customers, they can sue you for damages. When these damages exceed what your usual liability coverage can offer, umbrella insurance can provide what you need.
Why Do You Need It?
If you find yourself at fault for a multicar pileup, the expense may be far too much for your standard policy to cover. In such a case, umbrella insurance can cover the extra damages and medical costs until you meet the policy limit.
And if you’re a property owner, umbrella insurance can protect you in tough situations. For instance, if someone is injured on your property and sues you for damages, umbrella insurance can cover the excess costs.
Essentially, when an accident or issue exceeds the limit of your standard insurance policies, umbrella insurance will make up the difference as long as the excess is within the limit of your umbrella insurance policy. But again, because you can’t be sure when an accident will occur, you should invest in an umbrella insurance policy just in case.
How Much Do You Need?
Insurance agents recommend that everyone has an umbrella insurance policy of $1 million dollars, which costs about $200 a month. But if you have an income of over $100,000 or have around $1 million in assets, you may need more coverage. If you’re a landlord you may need up to $3 million or more if you have several rental properties.
Your insurance agent can help you determine what you need by reviewing your assets and your situation, and they can suggest the best coverage for you to keep your finances, your belongings, and you safe.
If you’re thinking about getting umbrella insurance to supplement your regular policies, contact an insurance specialist, such as Metropolitan Insurance Service Consultants, Inc. We can help you find the best policy for your situation, and if you have any other questions about umbrella insurance, we can provide more details and discuss your concerns.