Umbrella insurance is one of the many types of policies that many people don’t have because they don’t understand it. The policy is designed to provide you with added protection above and beyond what you have on your other policies.
What is it?
An umbrella policy is the added financial protection you need in case something happens. It activates once you file a claim elsewhere and run out of money with another policy. For example, if you get into a car accident and your car insurance coverage is exceeded, your umbrella policy would then be used to prevent you from having to pay out of pocket.
When you have one of these policies, it can be used as added protection for car insurance, home insurance, RV insurance, and more.
There are a few things to consider when you get an umbrella policy, too:
• How much coverage you want
• Personal vs. commercial
It’s important to take a look at all of your policies and how much coverage you have before getting an umbrella insurance policy so that you have the necessary coverage in place.
Who needs it?
Anyone can benefit from an umbrella policy because it is designed to reduce the amount you would pay out-of-pocket in an insurance claim. If you have any other type of insurance, it’s a good idea to get a custom policy.
If you got into an accident and your property damage liability was $20,000 and your accident totaled $30,000 worth of damages, the remaining $10,000 would be your financial responsibility because you have already exhausted what your auto insurance will pay. With umbrella coverage, however, the remaining $10,000 would be taken care of, thus saving you money and potentially preventing you from going bankrupt.
In the end, you have to look at all of the best ways you’re going to protect yourself financially. You don’t want to run the risk of an accident or incident occurring and not having the financial protection in place. An umbrella policy is an affordable way of having more coverage on all of your other insurance policies, either personally or commercially.