Umbrella insurance protects you if you are held liable for a large amount of money. It works similarly to an umbrella in that it fills in coverage gaps left by your typical insurance plans. This insurance can help with the claim and payout procedure when all other insurance is gone by covering certain fees.
An umbrella policy makes the process of handling claims and payments a lot more manageable. Read on to see how Stampede Insurance can assist you in locating the appropriate umbrella coverage for you and your family's needs.
What Does Umbrella Coverage Include?
If you hurt someone in an accident, umbrella insurance policies cover many issues, including medical bills, legal fees, and other costs. Some incidents that have umbrella coverage include:
- Car accidents
- Visitors who get hurt while visiting your home
- Dog bites
- You drive your car into a building
- If you cause a serious boating or car accident
Umbrella coverage can also protect you from libel, defamation, or slander lawsuits, which regular home and auto insurance won't cover. This type of insurance protects the policyholder and other family members or household members.
So, suppose you have a teenager who isn't the best driver in the home. In that case, you can rest easy knowing that your umbrella coverage will cover the medical expenditures of the affected parties if your teen is judged to be at fault in a catastrophic accident.
Cost Of Umbrella Insurance
Most $1 million plans, according to the Insurance Information Institute, cost $150 to $300 per year. For $2 million in coverage, anticipate spending an extra $75 per year and another $50 per year for each additional $1 million. Umbrella liability policies from most insurance carriers start at $1 million in coverage, with higher deductibles available.
Umbrella insurance for those with high net worths costs $383 per year for $1 million in coverage. However, when compared to other types of insurance, umbrella insurance is relatively affordable, especially given the amount of coverage it provides.
Factors Considered In The Cost Of Applying For Umbrella Insurance
When obtaining an umbrella insurance quote, the following factors are considered:
- Place of residence
- Net worth
- Credit score/history (depending on where you live)
- Risk of filing an insurance claim
- Driving record
How Much Coverage Should You Get?
Although you will not relieve your anxiety from a tragic incident, you will protect everything you've worked hard for with a policy at your disposal by purchasing an umbrella policy. Keep in mind that there are a few factors to consider while deciding on the coverage premium to get:
- Asset Value: An umbrella policy should at least cover your net worth, as this is what you might lose if you are sued.
- Estimated Future Income Loss: In the event of major litigation, it may jeopardize your future earnings. Consider your prospective future income, even if you currently have a restricted salary.
Frequently Asked Questions About Umbrella Insurance
To further assess your need for umbrella insurance, read through these FAQs.
What does umbrella insurance protect?
Umbrella insurance is supplemental coverage that extends beyond the limitations and coverages of other policies. Injuries, property damage, some litigation, and personal liability issues can all be covered by umbrella insurance.
Is an umbrella policy a waste of money?
An umbrella policy is not a waste of money for consumers with more than $500,000 in assets. Even if a policyholder never makes an umbrella claim, the low cost of coverage is usually worth the extra financial protection.
When should you consider getting umbrella insurance?
As a general guideline, if the total worth of your assets, including regular checking and savings accounts, retirement and college savings and investment accounts, and home equity, exceeds the limits of your auto or homeowner's liability, you should consider purchasing umbrella insurance.
The consequences of business deals gone awry or unforeseen situations may prove financially draining. Umbrella insurance can help alleviate some risks and explore opportunities to protect you and your loved ones in the smartest way possible.
Take your future into your own hands with less risk and an inch toward some semblance of peace with the right provider. Learn more about umbrella insurance with Stampede Insurance today!
