The Benefits of Umbrella Insurance
If you work in an industry with a high likelihood of being sued, you may discover the benefits of umbrella insurance. Likewise, working in an industry with high risk means you probably have liability insurance. It does not always cover you for damages at the same rate as an umbrella policy. Personal umbrella insurance can help you out of that predicament.
Liability insurance protects against potential lawsuits for third-party injury and property damage. But its coverage has limits. It is why there are many benefits of umbrella insurance.
If someone sues you for an amount higher than your plan covers, you must pay the balance out of your pocket. It could burden your finances considerably, possibly jeopardizing your business and personal assets. It is why personal umbrella insurance is essential.
The Benefits Umbrella Insurance: Things to Know
Umbrella insurance offers additional liability coverage beyond your current insurance policy’s limits. If you have to utilize your auto or homeowners’ insurance, for example, but exceed its coverage limits, umbrella insurance will make up the difference.
Let’s say you run a red light and hit another vehicle turning into your path. The other driver then sues you for vehicular damage, medical costs, and lost income amounting to $500,000.
If your insurance only covers $200,000, you will have to come up with the $300,000 balance out of your pocket. But if you have umbrella insurance, it will take over and cover the remainder, leaving your savings and personal assets intact.
Benefits and Drawbacks of Umbrella Insurance
Like all insurance policies, there are benefits and drawbacks to umbrella insurance. Some perks include added liability, legal liability, and legal defense coverage beyond standard auto, home, and vehicle insurance limits. Also, someone with umbrella insurance can obtain reasonably priced premiums for limits of $1 million and higher. They can get coverage in any country and cover rental items for which they have no insurance. Thus, it adds more to the benefits of umbrella insurance.
Alternatively, there are drawbacks. They need existing auto or homeowners and property insurance to qualify for umbrella insurance. Additionally, umbrella insurance and all other underlying policies should be with the same insurer. It could hinder the ability to get lower rates on individual insurance. It could also increase premium costs if requesting more liability coverage.
When is Umbrella Insurance Necessary?
At this point, you should ask yourself: “Do I need umbrella insurance?”
You aren’t legally obliged to have umbrella insurance to run a business, for example, nor do you need it to operate a vehicle.
Regardless, there are many good reasons to get this type of insurance. Getting umbrella insurance is probably a good idea if you have considerable assets or work in an industry or profession traditionally at high risk for liability suits.
Umbrella insurance could benefit you if you own property or have significant assets or savings. Moreover, it can help if you are at high risk for liability claims when traveling outside the country. It may help if you own high-injury risk items such as guns, swimming pools, recreational vehicles, trampolines, firearms, or large pets. Also, it can help you if you rent out a property. It benefits people who have inexperienced drivers in the family.
Essentially, getting umbrella insurance is advisable if you frequently face situations that could result in property damage or injury to third parties. There may be other conditions for which umbrella insurance is warranted, so discuss your concerns with an insurance agent.
The Bottom Line
Umbrella insurance isn’t for everyone, but there is no denying how valuable it can be if you exceed the coverage limits of your existing policies. Ultimately, only you can decide whether you need the extra coverage such plans provide. Discussing your concerns with a reputable insurance agent is advisable to determine if the added cost is worth it.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.