Understanding Umbrella Insurance and Why it’s Important

Nolen Agency Insurance

Have you heard of umbrella insurance? If so, you may not fully understand what it is or why it is important. This is a type of liability insurance coverage that goes beyond the limit of your watercraft, auto, or home insurance. Essentially, it offers another layer of security for anyone who may be at risk of being sued for damages they caused to someone else’s property or injuries that were caused in an accident.

It also offers protection against invasion of privacy, slander, vandalism, and libel. Having an umbrella insurance policy is extremely beneficial if you are sued and if the amount of money provided by your original policy has been spent. The additional coverage provided by liability insurance will be most beneficial for those who own many assets, who have expensive assets, or who have a higher risk of being sued.

A Breakdown of Umbrella Insurance Policies

The premium you are charged for an umbrella insurance policy is typically less if you purchase it from the same insurer you have used for your other insurance policies. Depending on the actual provider, if you want an umbrella insurance policy, you must also have base coverage of a certain amount in place.

Sometimes, umbrella insurance is called excess liability insurance. It offers a fail-safe for your assets and savings. If you (the policyholder) are sued for damages that exceed the liability on the base policy, an umbrella policy will help to pay what else is owed. It can also provide coverage that isn’t included in the base insurance policy.

Some of the situations when you need umbrella coverage include:

· Landlords

· Sports participation

· Coaching sports

· Posting reviews for businesses and products

· Volunteering

· Individuals on the board for a nonprofit organization

How Does Umbrella Insurance Work?

If you want to fully understand how umbrella insurance works, consider the following. If you run a red light and hit someone, there could be quite a bit of damage to the other vehicle along with injuries. If the car repairs are over $50,000 and injury treatment is more than $500,000, you may have to cover the expenses that go beyond the limits for coverage of your insurance policy. With an umbrella policy, you will have coverage for the liability costs that go beyond the limits of your car insurance policy.

Work with the Right Professional

It’s important to work with the professionals who can provide you with information and who can answer any questions you may have about insurance in general, along with umbrella insurance policies specifically. When you are informed, you can feel confident you are getting the coverage needed and that if an accident occurs, you will have plenty of coverage for the situation. This type of peace of mind is invaluable and can help ensure you are covered for any incident or issue.

Don’t wait to get the coverage you need. Most service providers offer free consultations to help you figure out if there is enough risk that you would need additional coverage from an umbrella policy.

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