Questions That Perplex:
- Is my insurance coverage adequate?
- Do I have the right amount and type coverage?
- What does all this technical insurance speak mean?
Umbrella Insurance Policy is extra liability insurance coverage that goes beyond the limits of the insured’s home, auto or watercraft insurance, providing additional layers of security to those who are at risk for being sued for damages to other people’s property or injuries caused to others in an accident. The added coverage provided by liability insurance is most useful to individuals who own a lot of assets or very expensive assets.
Does Umbrella Liability Cover My Home & Auto?
Umbrella Insurance doesn’t cover anything tangible, instead it covers liability, money you need to pay if found legally responsible for damages when someone makes a claim against you.
Often referred to as excess liability, it acts as a fail safe for your assets. If a policyholder is sued to the point the damages exceed their normal coverage, and umbrella insurance steps in to help cover the rest of the cost associated with the outcome. This is typical for a policyholder that may have a more extreme lifestyle or own certain items that can be considered dangerous and cause injury to person or persons who use them such as an ATV, pond, animal, etc.
How Much Coverage Do I Need?
There is no real formula to calculate the amount of coverage you will need. A personal Umbrella Policy provides coverage of $1 million or more in liability limits over and above the liability limits of your underlying policies, but as with ever coverage, the amount of insurance that’s right for you depends on your individual situation and risk tolerance.
What Factors Should I Consider When Deciding How Much Coverage I Need?
Net worth is definitely a factor to consider along with your current income. The more you earn, the more coverage you may want to consider. Consider your assets and debt as well as possible future purchases and lifestyle. Get smarter about your insurance planning.
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