In simple terms, umbrella insurance is a type of liability insurance that is purchased in addition to standard liability policies. It is designed to cover the policyholder’s assets in a broader manner than the standard policy. Basically, it is insurance that protects assets in the event of a lawsuit.
An Umbrella policy protects the policyholder from any lawsuit that may occur as a result of injury to someone else or damage to someone else’s property. This form of coverage is meant to be used in conjunction with primary insurance and cannot be purchased as a stand-alone policy. Benefits may take effect after the maximum amounts have been reached by primary policies.
The most common forms of umbrella insurance are associated with homeowners and automobile coverage. These additional policies can cover medical expenses, damages and lost wages, which an individual may suffer at the fault of the policyholder. It will not cover the policyholder’s personal expenses, such as auto repairs or medical expenses as the result of an accident.
In previous years, the need for this insurance was low and people who bought the additional coverage were upper class income earners. Today, however, the majority of consumers tend to sue others regardless of income level. Not all standard policies have protection amounts high enough to compensate. Umbrella policies can help provide these extra amounts.
Do you need an umbrella policy? One of our agents can quickly identify if you do. Even if you do not have assets that amount to much, you still have to pay for your defense in a lawsuit. The umbrella coverage can help. Consider your lifestyle, routine and family. If you or someone in your family is accident prone, has any disabilities or conditions that might cause impairment, this form of coverage can keep your family protected.