Every liability insurance policy has its limits. Whether you have homeowners insurance, auto policies or boat coverage, there are limits on what your policies will pay out from a claim. Even if you have a lot in savings, that doesn’t mean you want to pour it into settling damage you might cause others.
Your home or auto liability insurance covers the damage you cause third parties. Still, there’s a chance that your policy limits do not extend to the full cost of compensating those harmed. Could you afford to pay any remaining costs out of pocket?
Don’t risk it. Get umbrella coverage and worry less about where your policy limits end.
When Can Umbrella Insurance Step In?
Let’s say you have a car accident because you crossed the center line. You are the at-fault party in the wreck. That means you likely bear responsibility for the damage you cause others. You might have caused the other driver injuries and property losses in excess of $250,000.
Since you caused the wreck, the other driver might have a right to file a claim on your liability insurance. This coverage will provide the party with funding for their damage.
Yet, here’s the catch. What if your liability policy only pays a maximum of $100,000 for the damage? Since the other driver has $250,000 in damages, that means that a $150,000 hole exists. As a result, you may still have a debt to pay the affected party. That’s a lot of money to think about paying out under any circumstances.
In cases like these, umbrella liability insurance proves very beneficial. With it, you’re covered beyond the limits of your standard home or auto liability coverage.
To many, this protection can prove beneficial. It provides the extra coverage you’ll need in case you have to pay a substantial liability cost.
Umbrella protection can often provide more than additional funds. For example, coverage might extend to charges of mental suffering, slander or libel. Standard home policies typically don’t come with liability protection for these items.
Don’t let get caught in a lawsuit or other liability settlement without the protection you need. Talk to your insurance agent at 410-312-7800, and ask them how to protect yourself with umbrella coverage. Even if you have considerable reserves, you need to protect them with high limits. You’ll be able to worry less about someone taking advantage of your finances if they sue you for liability damages.
Also Read: Insurance Basics for the Young Professional