What’s an Umbrella Policy?
What happens if you get into a serious car accident, causing substantial injuries to the individual in the other vehicle and the medical expenses greatly exceed the liability limits on your auto policy?
What if there is a severe mishap on your property that triggers a costly legal claim that exceeds the liability limit on your home insurance policy?
What if your dog bites a child, causing serious injury and resulting in expensive medical bills?
An umbrella insurance policy gives you peace of mind knowing you have an extra layer of personal liability protection for predicaments like these. Just like an umbrella protects you from nasty weather, an umbrella insurance policy will protect you from costly liability situations. Umbrella insurance policies are typically purchased in increments of $1 million, and coverage applies after other applicable insurance policy limits have been exhausted. For example, if you cause a car accident and critically injure the other driver, your auto insurance policy would pay first, subject to the policy limit. If the policy limit was paid and you were still liable for more, your umbrella insurance coverage would apply. There are also instances when an umbrella insurance policy would provide coverage that may be excluded by all other policies. For example, if you are sued for libel or slander, this may be excluded by your home insurance policy but covered by your umbrella policy.
The biggest reason to have umbrella insurance is that it can protect you from having your personal assets, financial savings, or even your home seized in order to pay legal fees and other possible costs associated with being sued for negligence.
Do you really need to buy an umbrella? Technically, no. However, similar to the way a physical umbrella is not essential to survival but really comes in handy when it unexpectedly pours, an umbrella insurance policy can be instrumental in protecting you from an unexpected lawsuit. The person who is covered by an umbrella will benefit greatly from being prepared!
Who needs Umbrella Insurance?
Anyone who has a liability insurance policy, such as car or house insurance, can benefit from having an umbrella policy. Furthermore, anyone who has assets to protect, such as cars, a house, or a savings account should at least consider purchasing the additional coverage provided by an umbrella insurance policy.
The Insurance Information Institute estimates that umbrella coverage of $1 million can be purchased for as little as a couple hundred dollars a year. Contact Loiselle Insurance Agency to discuss whether umbrella insurance is protection you can benefit from having or to get an exact quote. Visit us online or call us at (401) 723-8510.