Insurance policies come in various forms. There is a type of insurance to cover everything from motor vehicles to personal health to apartment dwellings. While the majority of people understand the importance of insuring their homes and cars, many may not explore the benefits of a different type of insurance: umbrella coverage.
Unlike other types of insurance that only offer one specific coverage, umbrella insurance is a single policy that covers various aspects of a person's life. An umbrella policy can fill in the gaps where liability limits come into play with other insurance policies, keeping a person protected regardless of deductibles and other assets.
According to the financial resource Money Crashers, umbrella insurance is a type of liability insurance. Its main purpose is to protect policy holders in the event of lawsuits. The umbrella policy will provide additional coverage against bodily injury liability claims and property damage liability claims. These policies also provide broader forms of coverage and can help cover some legal fees, if necessary.
Trusted Choice Independent Insurance Agents says umbrella insurance is important because it can prevent financial ruin in the case of an accident.
The amount of umbrella coverage a person may need depends on how much that person is worth. Prospective policy holders can calculate their total assets and then take out policies in that amount or more to protect their net worth. Depending on the insurance company, umbrella policies range anywhere from $1 to $10 million. Coverage typically starts in the range of $150 to $200 for a $1 million policy. What's more, some insurance companies will not issue an umbrella policy unless the insured already has an automotive or home policy with them - and one that maintains the standard amount of liability in those other policies.
When reviewing umbrella policies, it's also wise to think ahead to future income and how one's assets may grow. Adjust policies to account for inferred earnings or other expected assets.
Learn more about umbrella policies that can offer above-and-beyond protection by speaking with a trusted insurance agent.
