If you’re like most people, you have adequate insurance for the vehicles you and your family drive, and your home is insured with basic liability insurance, and possibly fire or other types of insurance. Personal umbrella insurance is often overlooked until a major event occurs — such as a big accident or natural disaster that can put you in debt after realizing the insurance you currently have doesn’t cover the cost of damages. By obtaining personal umbrella insurance, you have the opportunity for supplemental coverage to protect your own personal assets in the event of an accident or disaster.
What are the benefits of personal umbrella insurance?
The primary benefit of personal umbrella insurance is that it protects your personal assets in the case of a major accident or disaster when your existing insurance does not provide adequate coverage. Umbrella insurance acts as supplemental coverage which makes up the difference between what your insurance will cover and what you have to pay out-of-pocket from damages. Anyone who owns a home, vehicle, RV, boat or motorcycle should obtain personal umbrella insurance to fill the gap between coverages. With personal umbrella insurance, you avoid going into debt or spending a big chunk of your savings due to an unforeseen event that costs you more than what your insurance covered.
How does personal umbrella insurance coverage work?
Personal umbrella insurance fills the gap between what your other types of insurance such as vehicle or home owners insurance, will cover and what the cost of damages are. Often times, the insurance you have for your home or vehicle don’t cover the cost of damages or repairs from major accidents or disasters.
For instance – consider this scenario: if a serious event has occurred on your property and the cost of liability equals $1.2 million but your home owners insurance only covers $850,000 for liability; it is not going to be enough to cover the entire cost. If you had umbrella insurance for $2 million then you have adequate coverage and can avoid making a dent in your personal assets.
Unforeseen events such as accidents occur every day and in many cases, are unavoidable. Due to the inevitability of these catastrophic events, it is best to be prepared ahead of time with optimum insurance coverage. By opting for personal umbrella insurance, you are supplementing other insurance policies you currently have and minimizing your out-of-pocket costs.