What is Umbrella Insurance?
Umbrella insurance extends liability protection for consumers who already possess one or many types of insurance policies. This type of insurance plan combines typical insurance plans such as car, home, and boat under one policy "umbrella." This umbrella provides coverage beyond that of the set liability limits determined by each different form of insurance. Umbrella insurance protects consumers against a variety of potentially devastating financial situations such as:- Injuries sustained on your property
- Non-intentional injuries caused by either the policyholder or their dependents outside of your property/properties
- Damages caused to or on another person's property
- Physical or medical damage caused by the policyholder or one of their dependents
- Malicious prosecution
- Harm caused to others by one of your pets
- Damage or injury caused by one of your tenants if you are a landlord
Umbrella insurance coverage
After you exceed the liability limits from your other insurance policies, umbrella insurance activates. For example, if you are responsible for an accident that causes $500,000 worth of medical damages, and carry only $300,000 worth of medical liability, your umbrella insurance plan covers the rest.
There are many stipulations to this example including a majority of insurance providers requiring umbrella insurance holders to have certain liability limits on their other insurance plans.
Who needs Umbrella Insurance?
Umbrella insurance is not just for the rich or the business owner; it is for anyone who needs extra financial protection. For example, if you own a potentially risky asset such as a pool, playground, or trampoline, you may want to consider an umbrella policy.
However, before you purchase umbrella insurance, it is important that you calculate your potential risks. It may be less expensive to purchase additional liability insurance protection than to carry an umbrella policy.
Qualifying
Each state and insurance carrier has their own set of rules and regulations regarding the qualifying requirements for personal as well as business umbrella insurance. However, all that is usually required to secure an umbrella policy is to own an insurance policy on any number of items including a car, home, boat, or business. To ensure your insurance policy meets the necessary requirements for an umbrella insurance policy, contact either your current insurance provider or providers.
Comparing quotes
Once you have received a quote, compare it to a multitude of other insurance company offers. With online insurance quotes, you can do this comparison easily, quickly, and conveniently from your home or office.
Umbrella insurance limitations
There are many circumstances where umbrella insurance provides sufficient coverage. However, there are certain cases where even umbrella liability insurance will not protect you from damages. One example of the limitations of umbrella insurance is punitive damages. Punitive damages refer to the financial amount awarded in legal cases. These damages occur when a client is legally and financially responsible for any particular action. Umbrella insurance also rejects certain claims deeming from gross neglect or intentional harm caused to another person, place, or thing.
Financial security and peace of mind
Ultimately, carrying an umbrella insurance policy is about peace of mind. This reasoning is precisely why most people choose to carry life and health insurance. The yearly premiums for a typical one million dollar umbrella policy are not that expensive, yet can help save your assets and family's future from a potentially devastating outcome. Carefully consider what an umbrella insurance policy can do for your financial future before choosing a policy. Contact your insurance providers or choose a stand-alone insurance company that provides umbrella coverage. Choose wisely and protect not only your assets, but your financial future as well.