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What are umbrella policies and when should you consider one?

Thursday, October 1, 2020

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You’ve worked hard for what you have – your home, car, family, and a successful life. You need insurance coverage that is going to keep all of this safe. When you are researching what types of insurances to purchase, umbrella policies come up a lot and they are something to consider regardless of the type of coverage you’re looking for. In the event of an accident that can’t be covered by your regular policy, the umbrella policy can save the day and your savings account.

What is an umbrella policy?

Umbrella insurance policies are a type of personal liability insurance that can be the line of protection you need in the event of an accident. These policies provide further protection if there is a claim against you that your regular policy doesn’t cover. They provide extended coverage beyond the existing limits in all sorts of personal liability policies.

Why are umbrella policies important?

You’ve spent years working hard and building up your savings account in the event of an emergency, but what if the damages you cause in an accident extend past the coverage you have? An umbrella insurance policy can end up saving you thousands of dollars and keep your savings account intact.

For example, let’s say you cause a 10-car accident. All 10 cars need to be repaired or replaced and the people in those cars need medical attention, but your auto insurance only covers up to $100,000 in damages. The umbrella policy would come in once that is maxed out and cover the rest, keeping you from paying out of pocket.

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What does an umbrella insurance policy cover?

There are a variety of things that can be covered by your umbrella policy. If you are liable for a claim that’s larger than your homeowners or automobile insurance can cover, the umbrella policy covers the claim. Even things that might not be covered by your other liability policies may be covered by your umbrella policy. These can include, libel, slander, false imprisonment, malicious prosecution, and can even extend to damages to rental properties you might own.

Should you get a personal umbrella policy?

A general rule of thumb is to always have insurance that at least covers your net worth. This includes everything in your savings and all assets. If your regular policy doesn’t cover this, then umbrella insurance is certainly something that you should consider.

You should also consider it if your job or anything else puts you at a higher risk of being sued. This could be anything from being a public figure, to being a landlord, to working with kids.

If you are worried about figuring out if an umbrella policy is right for you, then you can talk to one of our local independent agents. We can help you decide what the right choices for you are and shop around for the best policy that can fit your life. Insurance can be a stressful world to navigate, but it doesn’t have to be. Independent Insurance Associates will ensure that you and your family are covered in the event of something unexpected. Call us today to discuss your options.