As the name brings to mind, an umbrella insurance policy is a wide risk insurance policy that offers you additional coverage when your standard coverage comes to an end. Essentially, it begins where your different policies end or deals with things they may not cover.
Envision this situation: you are in an auto collision, and the other driver's vehicle is totaled and they endure severe injuries. You do not have enough insurance coverage. The individual winds up suing you for $500,000. Your normal accident protection insurance just pays up to $250,000 in damages. An umbrella policy can cover the additional $250,000 left by your auto policy.
The same thing can happen in your home. Maybe somebody slips and falls in your kitchen and is injured severely. You are responsible for their hospital expenses, and the costs are high, adding up to much more than your standard homeowner’s coverage will pay. Once more, the umbrella insurance coverage saves the day by picking up where your other insurance leaves off.
Another regular use for this type of policy could be expenses connected with accidents on the premises of rental property, false arrest, and other mismanagements of justice.
Most fundamental umbrella policies begin at $1 million and could be increased by million dollar add-ons, contingent upon whether you meet the requirements. If you are considering taking out an umbrella policy, take the time to survey your life. Do you own a home or investment properties? Do you have property that is worth a lot of money, such as a boat? Do you have an investment portfolio? If you answered yes to any of these questions, consider the value of your assets and contrast it with the insurance coverage that you have. This will help you to determine if an umbrella policy is necessary.