An umbrella policy can provide extra coverage for things such as your car, home, and boat. Ultimately, if you were to be sued and your coverage amount was insufficient, then you would have to pay the rest out of pocket. This is when umbrella insurance kicks in and covers the remaining costs.
In this article we will talk about the benefits and cost of umbrella insurance, and whether or not you need it.
Benefits of Umbrella Insurance
- You get protection from bodily injury liability claims. The injuries might result from a fall on your property or a car accident that was your fault.
- It may also protect you from damage done to someone else’s property.
- It can protect you from claims involving invasion of privacy, libel, slander, and defamation of character.
Do I Need an Umbrella Policy?
If you want to protect your assets and your money, you need umbrella insurance. Consider the risks listed below:
Outdoor and Indoor Dangers
Having pools, trampolines, and playground equipment on your property can increase the risk of injury. If someone is injured on your property they can sue you for damages.
Also, if you’re involved in activities such as hunting or skiing you potentially pose a risk to others. Accidents happen and that’s why it’s better to be protected at all costs.
Pet Owner
If you have a dog and they attack someone and they’re seriously injured, you can be sued. There’s many instances in the news where adults or children are attacked by dogs, so this is not uncommon.
Coach a Youth’s Sport Teams
Many people love to coach their children’s sports team. However, if a player ends up getting severely hurt, you might be liable for the damages.
Family Matters
Teenagers can run into trouble every now and then. For example, if your teen causes a fight at school or throws a party and someone gets injured, you could be sued. Umbrella insurance helps protect your whole family in situations like these.
How Much Coverage Do I Need?
Typically, umbrella insurance starts at $1 million. This includes all your assets and annual income, which is why the amount is high. The assets counted are:
- Home equity
- All your vehicles
- Jewelry and other valuables
- Cash and savings accounts
- Stocks and other investments
- Life insurance and 401K
How Much Is Umbrella Insurance?
Umbrella insurance is generally affordable for most. In most cases, the coverage costs around $150 to $300 annually. However, the exact cost will be dependent on you and your specific needs.
Summing Up
Since umbrella insurance isn’t expensive, there’s no reason why you shouldn’t purchase it. It’s always better to have extra coverage than not enough in situations like these. It can also offer you aid when other policies exhaust themselves.
Umbrella policies are an affordable way to protect your assets and financial stability.
Source
https://www.investopedia.com/articles/personal-finance/040115/how-umbrella-insurance-works