Umbrella Insurance: When You Need Extra Protection
Insurance is about the distribution of risk.
As an uninsured individual, you run the risk of suffering serious financial harm should you be found liable for an injury done to another person.
Put simply, if you hit someone with your car you are legally obligated to pay them for the damage you’ve caused. This is a risk, and a substantial one. The best way to mitigate this risk, however, is to put it on the shoulders of someone else. That’s where insurance comes in, it acts as those other shoulders.
Now, we insure just about everything.
You can have car insurance, boaters insurance, home owners insurance, catastrophic loss insurance, there are literally thousands of different kinds of policies on the market that can help you redistribute virtually any kind of risk.
Umbrella insurance, however, is a special type of policy for when you need to cover every base.
Generally, umbrella insurance is a policy that will come into effect once your other liability policies have been exhausted. Taking our car wreck example a step further, what happens if you hit someone and they have $30,000 worth of injuries, but you only have $25,000 in coverage?
If you have an umbrella policy, it pays the difference. This is the most obvious, and perhaps the most useful, aspect of such a policy. But it’s not the only use for an umbrella policy.
An umbrella policy might also cover a discrete issue for which you wouldn’t normally have coverage. For instance, many umbrella policies also cover things like personal liability related to claims of libel or defamation or damage done to a rental unit.
And while this is not the most common use of an umbrella policy, it is often one of the most useful aspects of such a policy.
So if you are in a situation in which you want the utmost protection from the risks of life, consider talking to an agent today about the benefit and utility of an umbrella policy.
Exploring the Benefits of Umbrella Insurance
This kind of coverage is all about the distribution of risk so as to protect the policyholder from many perils and loss-inducing scenarios.
For example, being uninsured or under-insured, you can be vulnerable to a whole host of serious financial issues if you are determined to be at fault for an injury done to another person and so much more.
Take this scenario as an example: If, as a driver, you impact a pedestrian with your car, then you are legally mandated to pay them for any damage for which you are responsible. Such a risk as this can be quite substantial, financially speaking. Perhaps the best method in mitigating such a risk is to purchase good umbrella insurance coverage to remove the burden from yourself and put it in the hands of the insurance provider to whom you have paid for this protection.
Standard Insurance Limitations
Though one can purchase a myriad of insurance policies for such things as cars, boats, home, life and so on, these attempts at mitigating any type of risk still have their own limitations.
This is where good umbrella insurance steps in; it is a special kind of policy to cover all the gaps that are left vulnerable with standard coverage and to go above and beyond your existing policy limits so as to better protect you, your family and your hard-earned assets.
Usually, umbrella insurance is a plan that becomes active once other policy limits are exhausted. To make it clearer, let’s take an example of an auto wreck. If you are found to be at fault for hitting another driver and they have $50,000 in injuries, but you only carry $25,000 in liability coverage, this is where umbrella coverage can be a virtual life-saver. The umbrella policy, essentially, compensates for the difference. Keep in mind that an umbrella policy can be useful in a whole host of other scenarios as well.
For instance, umbrella coverage might also pay out for a claim, (that could be publicly embarrassing), where you normally would not enjoy coverage. For example, a number of umbrella policies can cover for personal liability claims related to libel or defamation. It can also cover for destruction that is done to a rental unit that might exceed your existing landlord insurance and so much more.
When all is said and done, if you find yourself in a situation where you need the highest level of protection from the perils and accidents faced in life, contact an insurance professional today to discover more about the myriad of benefits and uses of a quality umbrella policy.