Umbrella insurance describes a type of insurance policy that covers and includes what a homeowners and auto insurance combination policy does not. This type of policy protects the insured against a higher level of liability than other insurance coverage. This type of policy includes cover that other insurance policies may not include. For this reason, an the policy increases the policyholder’s financial protect against liabilities or lawsuits.
Many people can benefit from this insurance. Anyone with assets should consider it. For instance, if an individual files a civil lawsuit and wins damages, assets may be at risk. Extra coverage could be used to pay the damage award and therefore protect personal or business assets.
People who seek the highest levels of insurance coverage purchase these insurance policies. They are not intended to be used instead of a homeowner or automobile insurance policy or combined coverage of the two. Purchase typically requires the policyholder to have existing highest levels of coverage on homeowner and auto insurance policies.
Since these policies typically have a high deductible that is intended to be covered by the homeowner and auto insurance coverage, it may benefit the policyholder when the other policies’ limits and/or liabilities are reached or not covered.
Individuals and businesses may purchase umbrella insurance policies. The policy usually extends the limits of the policyholder’s liability from USD 1 to 5 million. The home or business owner hopes to cover catastrophic events, including a lawsuit or act of nature, with this additional coverage.
An insurance agent can help the individual or business owner to determine the type and amount of additional liability coverage needed. Net worth is only one consideration. Many financial risks are possible in business and life. For instance, individuals in certain jobs may be a higher risk of having a lawsuit filed against them. Without adequate coverage, the individual’s hard-earned assets may be vulnerable. Various insurers underwrite this coverage and a licensed insurance agent is helpful in determining the insured’s best policy match.
Many people imagine that only wealthy people need an “umbrella.” An individual’s car, home, or savings may be placed at risk if an accident happens. A visitor may slip and fall at the insured’s home or office. If the injured person files a claim against the insured, then the added policy provides extra security.