Umbrella insurance provides additional coverage that is applied on top of your traditional insurance policies. These plans can be helpful sometimes, but it isn’t always clear whether someone will benefit from owning umbrella insurance. If you are wondering if it’s a good idea to have umbrella insurance, keep reading for more information.
What Is Umbrella Insurance?
Umbrella insurance is a supplemental form of insurance that exists to protect your existing personal assets and future personal assets. These policies pay out if you lose a lawsuit that costs more than your other insurance policies cover. With umbrella insurance, you gain an extra layer of protection from liability issues.
Who Needs Umbrella Insurance?
Umbrella insurance isn’t only for wealthy people. People with no assets can also have their wages garnished if they happen to be found at fault or liable in a costly accident. Because the coverage exceeds what is covered by your homeowners and auto insurance policies, you gain additional protection against adverse circumstances where your current policies aren’t adequate.
For example, if you are at fault in an accident that causes $1 million worth of damage and your auto insurance has a $300,000 coverage limit, your umbrella policy would pay the remaining $600,000. This can save you from financial ruin, making it a worthwhile purchase for many people.
Keep in mind that umbrella insurance can also pay for any legal expenses you incur if you’re sued. In some cases, policies will even pay if you miss work due to legal proceedings.
Is Umbrella Insurance a Good Idea?
Umbrella insurance is a good idea in most cases. Though, whether you need this form of coverage depends entirely on your unique circumstances. To find out more about umbrella insurance and if it’s right for you, contact All Things Insurance at (763) 645-5450.