If you are like most consumers, you have a monthly amount you’re spending on insurance whether it be home, auto, or life but you may not be aware of a different type of policy which is called umbrella insurance. The main reason you may not know about the benefits of umbrella insurance is because it’s protection is used in specific circumstances.
Umbrella insurance is also known as excess liability or personal liability insurance. This means that it’s not used as a sole policy but in conjunction with other policies when the other liability coverages have been used.
Is It Right For Me?
The first thing you want to do when considering if umbrella insurance is right for you is to think about your assets. If the assets you own are critical to your financial security, you may want to consider an umbrella insurance policy. If you’re like most, you think of your car and home as important assets, but you also need to think about the future of your income and the value they provide as well.
For example, if you happen to be involved in a lawsuit and don’t have enough to cover the damages, you will be responsible for the funds from your own pocket. If this were to happen and you could not afford to pay for the damages, an umbrella policy could help to protect you from financial hardship and downfall.
Another incident that umbrella insurance could be of use is in regard to your auto or homeowners insurance policies. If you happen to find yourself in a costly car accident that ends in a lawsuit, the costs could grow insurmountably and this policy would be a life saver in regard to your finances.
The best way to think about umbrella insurance is that it takes over when your liability insurance ends. It’s essentially just extra protection, and although you may not need it, if you end up actually needing to use your umbrella policy, you will be incredibly happy that it’s available.
What Does Umbrella Insurance Cover?
There can be some confusion when it comes to umbrella insurance when you first take a look at the policy but when you break it down it’s fairly simple.
- Bodily injury liability: covers cost of injuries to another person; medical bills
- Property damage liability: covers the cost of damage to another person’s property
- Other personal liability: covers other actions you can be sued for; slander, libel, false arrest
How Much Coverage Is Needed?
When you are planning how much coverage you need for your umbrella policy, it’s important to think about a few important factors.
The first thing you should think about is the total value of assets. The higher the asset value, the higher the policy should be although the value needs to be appropriate.
The next thing to be considered is the risk factor involved. This means a thorough analysis of risk involving the homeowner, causing an accident, and other dangerous activities that could put others at risk.
The last thing you should consider is the possible loss of future income. Since future potential income could be thought of as an asset, liability lawsuits can stake a claim in potential income.
Let Us Be Your Umbrella!
We would love to help you with your insurance needs and discuss the possible umbrella policy that could work for you. Reach out to our team at Willoughby Insurance, based out of Buffalo, NY today!