When it comes to protecting your home and family, one of the most important steps you can take is investing in an umbrella insurance policy. Many homeowners and families with kids often overlook umbrella policies. This policy is actually an incredibly valuable risk management tool that provides a layer of protection to guard against lawsuit damages, financial losses, medical costs and more.
So, if you’re considering adding this type of extra coverage but still need help understanding what exactly an umbrella insurance policy is – read on! We’ll discuss the basics of these policies and why having one makes sense for you.
Definition of an Umbrella Insurance policy
You may have heard of umbrella insurance, but just what exactly is it? An umbrella insurance policy is a type of insurance that provides additional liability coverage beyond what is covered by your other insurance policies, such as homeowners or auto insurance.
If a lawsuit is filed against you and the judgment is higher than the limits of your primary insurance policies, an umbrella policy can cover the difference, providing you with added financial protection. Think of it as an extra layer of protection against the unexpected.
Factors to consider when looking for an Umbrella Insurance policy
When it comes to protecting your assets, an Umbrella Insurance policy can be a valuable addition to your insurance portfolio. But what factors should you consider when looking for one? First and foremost, determine the amount of coverage you need, making sure it exceeds the total value of your assets. Most Umbrella policies will start at $1 million in coverage and go up from there.
Also, check if the policy covers all the liability risks you may face. Do you have a rental property, vacation home, boat or RV? Additionally, consider the insurer’s financial stability and their reputation for handling claims. Lastly, choose an insurance broker you trust. These professionals know the ins and outs of policies and what they cover. Cheaper is not always better. As a matter of fact, it’s almost never better.
What kind of coverage does an Umbrella Insurance policy provide
An umbrella insurance policy is an additional layer of protection that adds coverage beyond what your primary insurance policies provide. This policy may kick in when a claim exceeds the limits of your current insurance, giving you peace of mind in the event of an unforeseen accident or legal action.
For example, let’s say you have common auto insurance coverage that provide $100,000 in Liability Bodily Injury per person. If you’re at-fault in that accident, and the other person has more than $100,000 in Bodily Injury, your Umbrella policy will kick in.
Umbrella insurance typically covers a range of liabilities, such as property damage, bodily injury, and personal liability. It can also include coverage for libel, slander, invasion of privacy, and even false arrest. Having an umbrella policy can help safeguard you and your assets against unexpected events that could otherwise cause financial ruin.
How to determine if you need an Umbrella Insurance policy
You may be wondering if you need an umbrella insurance policy. If you own property, have assets, own a company or have youthful drivers in your household, an umbrella policy may be worth considering. It can protect your assets and future earnings in the event of a costly lawsuit.
It’s important to review your existing policies and consider your potential risks to determine if an umbrella policy is necessary. Consulting with an insurance agent can provide a better understanding of the coverage and benefits an umbrella policy can offer.
Tips for finding the best deal
When it comes to umbrella insurance, finding the best deal can seem like a daunting task. It’s commonly said around the internet to shop around and compare quotes from different insurance companies. Do you have an insurance license? Do you hold insurance designations? If not, trying to understand policies that are hundreds of pages long with endorsements and exclusions in legal speak is probably not the best approach.
Find a quality reputable insurance broker who can compare policies and price for you. This is their job and they do it everyday. Trying to make several agents compete against each other can result in an unbiased approach all in a bid to win your business.
It’s also a good idea to bundle your Umbrella policy with other insurance policies you may already have, such as homeowners or auto insurance, to qualify for multi-policy discounts. However, in certain situations it may be more advantageous to have a separate insurance company for your Umbrella policy. Your broker can walk you through your options and help you choose the best option.
The cost is much lower than what most people expect. It will vary depending on how many properties you own, number of drivers, number of vehicles, number of boats or other recreational vehicles and driving record.
Typically, you’ll be looking at around $150/yr – $500/yr depending on your situation.
If you’re interested in speaking with an insurance expert about adding Umbrella insurance to your plan, contact us today – we would love to help!
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