Perhaps you've loaded up on insurance: high limits on car
insurance, home and flood insurance, and ample life
insurance. But even these coverages can't account for every
disaster in life. To further protect your assets, there's
umbrella insurance. Personal umbrella insurance kicks in
when the limits of your auto or home insurance have been
exhausted and there are still damages to pay. How could
that happen? Say, for example, someone falls on your
sidewalk and sues you for an ungodly amount. Or say you
cause a six-car pile-up on the highway.
An umbrella insurance policy provides an extra cushion of
insurance protection.
How an Umbrella Insurance Policy Works
Umbrella liability insurance covers damage claims that you,
your dependents or even your pets may cause. They start
paying out after the liability insurance in your homeowners
and auto policy runs out. For example, if you have a home
insurance policy with liability coverage of $300,000, the
umbrella policy will pay claims above $300,000, up to the
limit you select, such as $1 million. Or if your liability
limit on your car insurance policy is $250,000 of bodily
injury protection per person and $500,000 per accident,
your umbrella auto insurance kicks in after you exhaust
that coverage.
Because the majority of claim risk is paid by your primary
auto or home policies, personal umbrella insurance is
relatively inexpensive. According to the Insurance
Information Institute, you can buy a $1 million umbrella
policy for about $150 to $300 a year. The next million will
cost about $75, and about $50 for every million after that.
Many insurance companies require that you purchase both
your home and auto insurance coverage through them in order
to buy an umbrella policy, too. Further, your insurer may
require you to buy auto or home liability limits at a
minimum amount, such as $300,000.
Umbrella Insurance Provides More Than Your Average
Liability Coverage
When you buy a personal liability umbrella policy, you're
getting more than just higher liability limits. You're also
buying broader coverage in case you're sued. The umbrella
policy covers you if you cause bodily injury, property
damage or personal injury. Some umbrella policies also
cover you if you face liability due to your service on the
board of a civic, charitable or religious organization.
But just as with any insurance policy, don't look to your
umbrella policy to cover your intentional acts that cause
damage. Nor will it pay for punitive damages in judgments
against you. Umbrella policies also do not cover damages
from any businesses you run; for that, you need a business
insurance policy. Check your umbrella policy for specific
exclusions.
Before buying an umbrella policy, ask your insurance
company about the cost to raise the liability limits in
your current auto and home policies. You may even consider
offsetting the premium increase for that by raising your
deductibles.
At any rate, in a litigious society it's smart to protect
your assets.
----------------------------------------------------
Amy Danise is a staff writer for http://insure.com . Visit
http://insure.com for a comprehensive array of comparative
auto, life and health quotes, including a vast library of
originally authored insurance articles. Insure.com is
dedicated to providing impartial insurance information to
consumers. Visitors can obtain instant quotes from more
than 200 leading insurers, achieve maximum savings and have
the freedom to buy from any company shown.
No comments:
Post a Comment