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Personal umbrella policy

Umbrella insurance, which is a form of liability insurance, is meant to give extra coverage beyond normal policy limits. It is usually limited to car, home, or boat insurance. It can also be helpful for claims that would normally be not be covered by most liability policies. It is sometimes known as excess coverage but that can be confusing as there is something different that is more accurately titled excess coverage.


Who is best suited for umbrella insurance?

If someone owns a home, a business, or perhaps has acquired significant wealth over time and wishes to protect his or her assets, umbrella insurance may be a wise choice. It is very helpful to those who are at a high risk of litigation too. Umbrella insurance can often provide the insured and his or her family protection in the event of some sort of catastrophic event. As is the case with insurance, we hope never to use it, but when we are in need of it we are glad we did not skimp. Prime candidates are people who have built up assets over the years. These insured should maintain an umbrella policy that at least covers an amount equal to the approximate total monetary value of all their assets. Periodically, they should adjust their policy to match either the expansion or contraction of the total value of their assets.


How does umbrella insurance work?

Umbrella insurance comes into play if the insured is found liable for something and is compelled to pay damages beyond their basic coverage. It is also helpful if one is sued and requires assistance in paying for a legal defense. Basically, an umbrella policy starts to pay when your basic liability limits are exhausted or a claim is for some reason exempted from the basic liability coverage. If one is determined to be liable and the settlement exceeds coverage limits, rather than one being responsible for out-of-pocket payment of the extra amounts, ones umbrella insurance goes into effect protecting the policy holder.

Umbrella coverage can also come into play when claims are excluded in other policies. These kinds of claims are not usually foreseen but can be very essential to ones well-being in cases such as false arrest, libel, slander, landlord/tenant issues, invasion of privacy, to name a few. 


The Benefits

The overarching benefit of umbrella insurance is the protection of assets. For a relatively modest cost, this coverage is very helpful. Coverage limits hover between $1 million and $5 million. Convenience is also a big plus here. It is very easy to get this extra protection at a discount when bundling with existing policies you already have with your present insurer. Plus, your policy will cover you anywhere in the world. Ask your agent for more details.

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