Extra Liability: An In-Depth Look at Umbrella Insurance

Did you know that people file more than 40 million lawsuits every year? 

Many people don’t realize that they could be sued at any moment. You may think that your current insurance policy has you covered, but it probably doesn’t. In fact, most insurance policies will cover you to a certain extent, but after that, you’ll have to start paying out of your own pocket. This is where an umbrella insurance policy can protect you.

But what is umbrella insurance coverage, and how does it compare to any other type of insurance? Keep reading and learn more about umbrella insurance policy options.

What You Need to Know About Umbrella Insurance

Umbrella insurance is exactly what it sounds like: a policy that covers you from a wide range of possible damages and liabilities.

Suppose that you invite a few guests over to your house, and one of them slips and falls on the stairs and breaks their back. They may become paralyzed from the waist down and have to live in a wheelchair for the rest of their lives. That guest may then decide to sue you for their injuries. If they do, you could be in a lot of financial trouble. 

You may think your homeowner’s policy can protect you from this kind of liability, and you would be right to an extent. Still, all homeowner’s policies have limitations that, once exceeded, can no longer help you. And whatever your insurance doesn’t cover, you’ll have to pay out of pocket.

Considering these lawsuits can cost thousands upon thousands of dollars, hopefully, you have enough to cover these expenses.

Few people are prepared for this kind of situation, but those who know that purchasing an umbrella policy is probably the best way they can protect themselves and their assets.

Additional Coverages

An umbrella policy is considered a type of personal liability insurance, and it can do much more than help you with your homeowner’s insurance. It can also bolster liability coverage for vehicles, watercraft, personal possessions, and more.

The great thing about this insurance policy is that it lets you know you are protected in case something happens. You won’t have to worry about losing everything if someone happens to sue you. The insurance policy will instead act as an additional safety net.

How Does Umbrella Insurance Work?

Umbrella insurance blends perfectly with the insurance plans that you already have. It complements business, auto, and homeowner’s insurance plans especially well. It will kick in if an event exceeds what your normal insurance plans cover. 

Instead of those excess costs taking money directly from your pocket, your umbrella insurance will pay for those costs, with most umbrella insurance covering up to one million dollars in liabilities or damages. If you have more assets to protect, consider higher limits to be fully protected. 

The cost of the insurance depends on what is being covered,  for example: the number of vehicles, homes owned, rental properties, driving records, age of drivers, and other factors. The good news is that umbrella insurance is affordable, starting around a few hundred dollars a year.

What You Need to Know

You may be wondering whether getting umbrella insurance is worth it. After all, what are the chances of someone suing you for exorbitant amounts of money?

Well, the answer is simply that while the chances of an expensive lawsuit may be slim, they aren’t zero. These lawsuits could disrupt your life if you end up stuck with hefty payouts, so it’s better to protect your assets with umbrella insurance than go through life without one. 

Do You Need Umbrella Insurance?

As an insurance agency, we always recommend being fully covered as you accumulate assets, so we would say yes. Umbrella insurance is one of the best ways to secure your family and yourself. It acts as a safety net on top of your insurance plans. It ensures that you may not have to pay out of your pocket if someone sues you*.

To learn more about it, check out our insurance options.

*Up to the limit you have chosen.