Umbrella Insurance Basics
You should have a fair amount of liability coverage between your homeowners, renters, or auto insurance policy. But you still might find yourself short if you seriously injure someone or cause massive property damage. An umbrella insurance policy provides additional liability coverage.
It becomes active when your other liability coverage reaches its limits.
Protect Your Assets
If you have a significant amount of valuable assets, then you should consider an umbrella policy. The more valuable your assets, the more at risk they are should you face a lawsuit. The main purpose of this policy is to keep you or your business from losing valuable assets.
How it Works
An umbrella policy only works when another of your liability polices has reached its payout limit. For instance, an umbrella policy would help pay a judgement amount that exceeds your existing coverage. Your existing liability might only pay $100,000 or a $200,000 judgment. Your umbrella coverage would then kick in and cover the remaining amount. An umbrella policy can work with homeowners, auto, boat, or renters policies.
The main benefit of umbrella insurance is that it protects your assets. It’s possible to lose everything should you lose a huge lawsuit. But with this insurance coverage, you’ll have financial help paying the cost.