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The Basics of Umbrella Insurance


Let’s talk umbrella insurance. You may be wondering, “So, what is it exactly and is it something I should consider purchasing?”

To answer the second part of that question, yes, you should consider purchasing umbrella insurance. To help you understand why, let’s go over the basics.

Umbrella Insurance Provides an Extra Layer of Protection

When you have auto insurance, you’re protected financially if you are in a car accident. When you have homeowners insurance, your home and property is protected financially when there is a theft or damage, according to the conditions of your policy.

But what happens if you file a claim and reach your policy limit? Then you have to pay the rest of the costs out of pocket. What happens if you are sued for a car or home accident? Then you will likely have to pay the extra costs associated with litigation and settlement.

These costs can quickly add up to a million dollars or more, which means you are in jeopardy of losing your assets. However, when you have umbrella insurance, your coverage extends and your assets are safe.

What Umbrella Insurance Does and Does Not Cover

In most cases, your umbrella insurance will cover costs that go over your other insurance limits.  The following are examples of some scenarios that can be covered by an umbrella policy:

·         Medical bills for the other party in a car or home accident if you’re found at fault, even if it occurs outside the United States.

·         Property damage costs if you or a family member or pet is responsible.

·         Legal fees and court costs in a lawsuit, even if you’re not found to be at fault.

·         Other legal damages such as libel or slander, false arrest, malicious prosecution, violation of privacy, and others.

There are a few scenarios that umbrella insurance typically won’t cover, including:

·         Your own lawsuits against someone else

·         Your own bodily or property damage

·         Malpractice lawsuits

·         Workers comp claims

·         Business-related damage

·         Intentional damage

Some of these instances might be covered by separate insurance products (for example, medical malpractice insurance for doctors), but they aren’t typically included in an umbrella policy.

The Low Cost of Umbrella Insurance

Umbrella insurance is surprisingly affordable, especially when compared to other types of insurance. For coverage of $1 million, it typically will only cost you between $200 and $350 a year in premiums. For every increase of $1 million coverage, your cost will usually increase by $100.

Put simply, umbrella insurance gives you millions of dollars in coverage, usually for less than $50 a month in premiums.

Learn more

If you feel that your personal insurance coverage isn’t adequate or your assets are at risk, visit the Moreno Valley insurance agency Best Insurance Services Inc. We will guide you through the process and help get you protected!