TUESDAY, APRIL 27, 2021
When insuring your home, car, boat or other personal asset, you will often find liability benefits within the various policies. This coverage is designed specifically for the purpose of helping you compensate others to whom you caused harm as a result of your negligence. 
Your standard liability benefits are designed to offer coverage only up to certain limits. So, if you have $100,000 worth of homeowners liability insurance, then you might only receive $100,000 worth of assistance if a neighbor sues you because they got hurt on your property. What can you do if a liability claim exceeds the limits of your existing policy?
A benefit called umbrella liability insurance can help under these circumstances. It will provide benefits in excess of the limits of your standard liability benefits. It can be instrumental in helping you recover from some very challenging financial circumstances.
The Benefit of Personal Umbrella Insurance
Once a liability insurance claim exceeds the limits of your standard liability insurance, then you run the risk of having to pay any third-party costs that rise beyond the limits of your coverage. If you don’t have this money, then you could face numerous challenges. As a result, it’s better to consider enrolling in umbrella coverage.
Most personal umbrella policies offer at least $1 million in added liability coverage. Consider the benefits of this coverage:
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The cost of a lawsuit can far outweigh the value of your personal assets. Liability lawsuits may not only drain your current assets, but also leave you paying off the expenses for years to come. With an umbrella plan in place, you have some protection against that risk, and allow your policy to pay for excess losses on your behalf.
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A million dollars in extra coverage, even to those of us who earn a comfortable living, sounds like something very expensive. However, a policy at this scale may only cost you a couple hundred dollars a year, which is very affordable.
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If you make six figures a year or have more than a million dollars in assets, you will want to buy more than $1 million in umbrella insurance. For the rest of us, $1 million should be more than enough to cover all but the most unlikely of circumstances.
In a way, you can think of umbrella coverage as insurance for insurance. Your home, auto, boat or other personal policies can offer you liability insurance, but they are only good up to a certain amount of money. If you ever face a scenario where your standard benefits can’t reach far enough, you can often find that you will have this assistance offered in your umbrella policy.
More than that, umbrella insurance provides peace of mind. It helps knowing that you're going to be taken care of, and that a lawsuit or a liability claim isn't going to leave you wondering how you're ever going to pay for it.
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