Protect your Assets with an Umbrella Insurance Policy
Umbrella insurance Policy is a type of liability insurance which is secondary in nature. Meaning, it is not a stand-alone kind of policy. It gives the user an added protection against any lawsuits that exceed the normal coverage policies. It covers your personal liability above and beyond the standard liability insurance coverage. This policy can be used to cover multiple properties, automobiles and more depending upon your selection of coverage.
Umbrella insurance policy is also known as Excess Liability Insurance Policy.
This is an inexpensive way to protect your financial future and established assets.
Umbrella insurance provides coverage from;
- Litigation which rises from property damage or injuries.
- Legal defense costs for lawsuits from damages to other’s properties and injuries.
Necessity of a Primary Policy
As stated above, umbrella insurance is a secondary policy. It requires an underlying primary liability policy to first pay out before umbrella coverage becomes effective.
For instance, home insurance policy provides primary insurance for a certain amount to be covered. In case of damage to the residential property of an individual. If the damage is so extensive, or the policy cannot cover all the losses for any other reason. And the home insurance policy becomes exhausted. Then the umbrella insurance kicks in and covers the remaining costs without leaving you destitute.
Necessity of Umbrella Insurance
Lawsuits have become a fashion these days. There are even several people, including some law firms. Who have made it their primary source of income to search for a soft enough target. And sue them in the court for any perceived claim to get money out of them. There are many kinds of businesses which cannot afford for their company to be dragged into the court. Even if they are confident that they can win their cases. That is because lawsuits give a negative publicity and may cause irreparable reputation damage among their client base. These law suit leeches take advantage of this vulnerability. And demand outrageous amounts in lieu of out of the court settlement.
If ordinary policies fail to provide coverage for such claims, which they usually do. Umbrella insurance gives the secondary layer of protection to you. And your business without having to dip into your war chests.
Cost for an Umbrella Insurance
Personal liability umbrella insurance policy can cost as little as $100 for coverage of up to $1 Million a year. Depending upon how much coverage you decide to purchase. Additional liability insurance similarly costs as little as $100 to $150 for coverage of up to $1 Million a year. It is undoubtedly the cheapest $1 Million you will ever buy.
A Deeper Understanding of Oneself
Deciding how much of the umbrella excess liability insurance you need. Depends upon your own understanding of your personal and your business’ situation. You must gauge what and how much you stand to lose and what risks you stand to face. The potential worth of your assets and potential understanding of the magnitude of those risks will allow you to make a deeper understanding of how much of the policy you need to buy.
Those Who Need it the Most
Those people who have established assets and wish to protect them. Because they stand to lose significant amounts of capital if they are caught in a losing lawsuit need Umbrella Insurance the most. If they get sued, they would lose not only their established assets. But also investments and savings. Their whole future earnings or assets may come at a risk. And everything they have worked their whole lives to build would come crumbling down. Those people who can see such a scenario coming true for any reason at all. They absolutely need umbrella policy, and they need it NOW!
Everything is up for grabs in a litigious society. It includes your savings, your investments, and in absence of your assets, potentially your future.
Those who have Absence of Assets
Even if you do not have any investments or assets to call your own. You still must get an umbrella insurance policy. The reason for that is, a court would still grant benefits to the one who has sued you regardless of you owning your own assets or not. If you do not have the umbrella policy to cover for you. Then you would be liable to pay those damages by future earnings. Which will make your life incredibly more difficult. Since a significant amount of your future earnings or pay would be spent in paying the damages off.
Necessary Information for Umbrella Insurance
An insurance agent usually asks typical questions. When you are asked for an interview by him or her for obtaining an umbrella policy. These questions may include;
- A list of all your properties worldwide, as well as the agencies who have insured them.
- Primary liability limits for all your properties.
- A list of all automobiles you own and their liability insurance limits.
- A complete picture of all your assets and investments.