You have a lot of important, costly belongings you’ll want to protect. That is true particularly if you face lawsuits that could cost you a lot of money. Eventually you may face significant hardships and asset seizures as lawsuit costs rise. You might benefit, however, from umbrella insurance. This coverage is important to those who have a lot of assets to cover, and you’ll soon find out why.
Understanding Umbrella Coverage
You might have home insurance, auto coverage, boat insurance and more. Each of these policies will likely include liability insurance. The liability coverage will safeguard you in case you cause harm to others. It will help you repay them for those losses that were your fault.
Yet, all liability policies will have their limits. So, if you were to face a claim that exceeded your policy limits, you might need more help. Still, if you don’t have enough liability insurance, that does not mean you are off the hook. Lawsuits and settlements might get expensive. The authorities might even begin to seize your personal assets to act as collateral in settlements.
With umbrella insurance, you can likely avoid this extra threat. Your policy might help you cover costs that your standard liability insurance won’t pay. You can worry less about surrendering possessions just to meet those costs.
Why You Might Need a Lot of Umbrella Coverage
You never want to think about a devastating accident in your home. Yet, it could happen.
Perhaps, one day, one of your child’s friends visits. In a horrific turn of events, the child falls over the balustrade of your upstairs balcony. They fall to the first floor below, and sustain permanent, life-altering injuries. You didn’t mean for the accident to happen, but the child’s family might hit you with a whopping lawsuit of over $5 million.
Should you have to pay a settlement, think about how much you could stand to lose? Can you really afford $5 million. A homeowners liability policy likely won’t offer this much coverage. However, umbrella insurance might be able to help you cover extra losses after your home insurance pays. You can generally get a basic umbrella policy starting with at least a $1 million minimum limit.
The more you have to lose, the more important an umbrella policy becomes. The good news is, with one policy, you can extend coverage to auto, homeowners, renters and many other forms of liability insurance. So, if any of these policies ever pay to their limits, you have more coverage.
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