Umbrella Insurance. All you need to know
There are times when we may have a situation and we need protection to cover us in these situations. But what happens when we no longer have coverage in our insurance? Can we have some type of extra coverage? Well, we want to tell you yes. Yes, there is an insurance policy that helps you make up the difference when your liability coverage runs out, but the expenses don’t end. It can also provide coverage if you face lawsuits for various reasons.
But what is a general insurance policy? Below we explain it in more detail.
What is an umbrella insurance policy?
Umbrella insurance is a type of liability insurance that can provide you with extended coverage if you face a claim in excess of your policy. Not only does it protect you, but it helps you cover any member of your household if they are the ones causing a serious accident. This insurance helps protect your finances and values. Failure to pay a liability claim for which you are responsible may result in a lawsuit. That’s when your personal values will be in danger.
This type of insurance may be similar to excess civil liability policies, but the two do have a difference.
Excess liability policies provide you with limits beyond your current policies, while umbrella insurance helps you pay the difference in what you owe while protecting you from other charges that normal insurance does not offer, such as legal bonds and defamation accusations. Umbrella insurance works to prevent financial ruin.
What can it cover?
- Bodily injury coverage: Covers physical damage to anyone except people who live in your home. This includes the claims and medical bills of the person who suffered the injuries.
- Property Damage Coverage: Covers loss or damage to another person’s property. This can help you if you run out of car insurance funds during the process of fixing the vehicle of the person you crashed. Also, it can offer you coverage in case your child or pet destroys or causes damage to property when they are at a friend’s house or at school.
Your “umbrella” policy can also cover you if you own a property and rent it out. If someone is injured on your property and the person files a lawsuit against you, your policy will protect you from that cost. Also, you may have coverage in case one of your tenants’ pet hurts someone and that person sues you.
- The costs of a judicial process: will be covered by your “umbrella” insurance. When your attorney defends you in court after someone files a lawsuit against you, you may have to pay a portion of the costs out of pocket. Lawsuits take a long time and are also very expensive. It’s very easy to quickly reach the limits of your regular coverage. An umbrella insurance policy can protect you from having to pay the rest of the costs.
How do I know if I need umbrella insurance?
Actually, this type of insurance is not necessary for everyone.
If you think someone is likely to sue you and you have the money to cover these extra expenses, this type of insurance is not necessary. On the other hand, if you have several aggressive dogs, or if you have teenage children who already drive, you may need to purchase such an insurance policy.