There are many reasons to consider investing in an umbrella insurance policy or umbrella policy, which provides additional liability protection above and beyond what is offered in the basic coverage of homeowners, renters or automobile insurance policies. If you have umbrella insurance policy in addition to a basic policy you’ll be protected if you’re ever sued or cause an accident with excessive injury or damage.
Why You Need It?
Americans spend more than 2% of GDP (the Gross Domestic Product was $19,390,600 million in 2017) on civil litigation that quite a bit higher than any other industrialized country. 15 million civil cases are filed annually and 80% of the world’s lawyers live in the united states.
All insurance policies have coverage limits. If you injure a person or damage their property, your insurance might not cover the entire claim. This is where umbrella insurance policy comes in. The umbrella policy pays for the portion of the claim that your basic policy doesn’t. This is especially advantageous if you find yourself at the receiving end of a lawsuit. People are quick to sue these days, and it’s not unusual to see judgments against individuals in the millions of dollars, which your current insurance policy won’t cover entirely.
How Does It Works?
The way that umbrella insurance policy works is simple. If you’re liable for $900,000 in damages from a car accident and your auto insurance policy has a $100,000 limit, your umbrella policy covers the remaining $800,000. Or if you’re sued for something like slander that isn’t covered by traditional insurance policies, an umbrella insurance policy will take care of it. Pretty much anything that isn’t covered by a basic homeowners, renters or automobile insurance policy is under the umbrella policy.
Each umbrella insurance policy is different, but they all cover similar things. These include claims of bodily injuries or property damage that you, members of your household or hazards on your property caused. Policy holders also get additional auto liability coverage above and beyond what is covered in any basic policy, and personal injury claim protection for non-business-related liabilities. The umbrella policy will even cover legal defense fees for an injured party, which can easily exceed the limits of any basic insurance policy.
Limits of Typical Umbrella Policies
It’s important to know that things like intentional damage or damage that came from business or professional pursuits will not typically be covered by an umbrella insurance policy. If you accept liability under the terms of a contract or agreement or are liable for damage to your own property, it will not be covered. Liability related to the ownership, maintenance and use of aircraft, nontraditional watercraft and most recreational vehicles will also not be covered. Most policies exclude damage covered under a workers’ compensation policy or liability resulting from war or insurrection as well.
What is the Best Way to Buy Umbrella Policy
The easiest way to acquire umbrella policy is to call your existing car ad home insurance agent/broker and ask them to add umbrella policy. It is very inexpensive policy – around $200/300 for $1 million, $600 and $5 million and $1000 for $10 million.
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