Why You Need Umbrella Policy Insurance

America is a nation of lawsuits. If you’ve ever been on the receiving end of one of these, you know how unpleasant the experience can be, not to mention the potential cost. A single lawsuit could wipe you out financially, even if someone sustained injury on your property that wasn’t even your fault. Say, for example, during a storm, the wind broke a branch from one of your trees and fell on someone’s head. You will most likely be held responsible, even if the accident was not within your control.

Would your homeowner’s liability coverage pay for the court award to the victim? What if the judge awarded more than your policy covered? The solution is to have umbrella policy insurance.

What’s umbrella policy insurance?

Think of umbrella policy insurance as an umbrella – something that protects you. It’s placed on top of your regular homeowner’s insurance and auto insurance. Umbrella policy insurance closes gaps and “donut holes” in your present policies by paying above and beyond their coverage.

How does umbrella policy insurance work?

To understand how umbrella policy insurance works, take the example mentioned above. Someone is injured on your property. You either settle out of court for an agreed upon amount, or no agreement can be reached, so the case goes before a judge. You have $250,000 of liability insurance coverage with your homeowner’s insurance policy, so you figure you’re covered, right? What if the judge awards the plaintiff in the case more than that amount? What if $500,000 is the awarded amount? That means you’ll have to come up with the additional $250,000 on your own to satisfy the claim. This scenario would financially ruin many Americans, forcing them to lose their home, their automobiles, and anything else they have. Anything of value can be seized to satisfy the judgment, and if you don’t have enough earnings to cover the amount, your future earnings and even any inheritance will be jeopardized.

If the above happened and you had umbrella policy insurance, it would kick in after your regular insurance policy was capped. How much would it pay? That depends on you – you choose the amount of additional coverage you want with the umbrella insurance coverage. That might be $1 million, $2 million, or even more.

What all will umbrella policy insurance cover?

An umbrella policy covers a wide range of claims. These might include libel, slander, wrongful entry, false arrest, vandalism committed by minors, invasion of privacy, and injuries and property damage from natural disasters, auto accidents, and other ways in which you can be held responsible.

The umbrella policy will cover you, no matter where you are on non-business. Say someone has an injury on your boat; you covered. Say you’re playing baseball and you accidentally hit someone in the head with bat, and they receive a serious injury. You’re covered. What if your teenage son destroys someone’s property with vandalism? Your umbrella policy insurance will cover that, too.

How much does umbrella policy insurance with homeowners insurance cost?

Umbrella policies are very affordable, largely because they have high deductibles. Don’t let that scare you – remember, they pay after and above what your regular homeowner’s insurance or auto insurance pays. They’re designed to pay after your regular policy has been exhausted. For example, say your liability insurance covers up to $300,000, and your umbrella policy insurance has a $300,000 deductible. If you were sued for $500,000 and lost the case, your regular insurance would pay $300,000, then your umbrella insurance would cover the other $200,000.

Umbrella insurance coverage usually costs around an average of $250 per year for $1 million worth of coverage. That’s really pretty inexpensive when you consider the peace of mind and financial protection these umbrella policies provide!

Who needs umbrella policy insurance?

There’s no way of knowing when or if you’ll ever be sued, or what a judgment might be if you are sued. Why take a chance? We have umbrella insurance coverage, so I don’t worry about getting sued – I know I’m covered!

Some people think only rich folks need umbrella coverage, but that’s just not true. You probably have more to lose than you think. Consider your home, all your property, and your paychecks from now until you die. That’s quite a chunk of change!

Where can I get umbrella policy insurance? Can I get online homeowners insurance quotes?

Remember, you must have regular insurance first. You can get quotes on homeowner’s coverage online. Getting online homeowners insurance quotes is a great way to do comparison shopping. While you’re online with homeowners insurance quotes representatives, inquire about an umbrella policy, too.

If you feel more comfortable with your present insurance company, sit down with a representative and discuss your assets and your potential liabilities. Together you can design an umbrella policy insurance plan that works best for your unique situation, and he or she can provide you with an umbrella insurance quote.