Do You Have Adequate Insurance Coverage? How Umbrella Insurance Can Help

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When people think of insurance policies, they may think of different categories, like homeowner's, auto, or worker's comp. However, there is an insurance policy that can cover a wide range of categories: the aptly named "umbrella insurance." Read on to learn more about what umbrella insurance covers and if it would be beneficial to your lifestyle.

What is Umbrella Insurance?

Again, umbrella insurance covers a wide range of categories. Just one umbrella policy could cover the following:

  • Injuries you received from a car, motorcycle, or boating accident
  • Injuries your guests, neighbors, or family members incurred on your property
  • Certain lawsuits, such as reputation damages (false arrest, slander, libel, etc.)
  • Court costs and legal fees
  • Liability for being a landlord (e.g. slip-and-fall injuries)
  • Damages to your vehicles, property, and other assets
  • Damages caused by you, your pets, and/or children on others' property

Umbrella Insurance Doesn't Replace Your Other Policies; It Enhances Them

You might be thinking Wow! Why would I need other policies? Umbrella Insurance seems to cover everything. It's true that umbrella insurance can help cover different scenarios, but that doesn't mean you can forgo your other policies since umbrella insurance is supposed to be bundled with them.

So how does umbrella insurance enhance your existing policies? Imagine if you got into a major motorcycle accident. Your motorcycle insurance might kick in and only cover your injuries and the other party's injuries to a certain amount since some policies have an annual cap. However, if the cost of the injuries exceeds that cap, then your umbrella insurance could then kick in and cover the difference.

Ultimately, umbrella insurance is a way to pick up the slack of your other policies if you happen to need more coverage.

Who is a Good Candidate for Umbrella Insurance?

While umbrella insurance can be a great policy, it's not for everyone. If you are single, don't own a house, or don't have lots of assets that need protecting, then umbrella insurance could be superfluous. Typically, you need to have a net worth of at least $1 million for these policies to be worth it.

People who are good candidates for umbrella policies are those who have a higher chance of being sued. For instance, if you have a swimming pool, then it is a good idea to consider an umbrella policy since this feature can be especially dangerous to children. Do you have a specialty vehicle, like a boat? Again, this toy could potentially set you up for a lawsuit if you injure others, meaning that umbrella insurance would be a good idea.

While umbrella insurance policies are great, they don't always cover everything. For instance, business owners may need to look at a different policy if they want extra coverage. As you can see, there's a lot of variables that go into play with this kind of insurance. So it's in your best interest to talk with an insurance broker to see if you are truly an ideal candidate for umbrella insurance. To learn more, contact an insurance company like All Risk Insurance Group.


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