U is for Understanding Umbrella Insurance

U is for Understanding Umbrella Insurance

Umbrella insurance is a type of personal insurance that covers you when other types of insurance have either failed or run out. Say you caused a car accident, where the other person and their vehicle were seriously injured. Your collision and liability are worth $50,000, but their expenses are worth $100,000. Unfortunately, you are on the hook for the other $50,000, putting you at risk for financial ruin and debt.

But if you are covered with umbrella insurance, this will pick up where your auto insurance leaves off. Umbrella insurance will protect your savings, investments, and other assets in the event of exceeding your insurance policy(s). This can include car insurance, homeowner’s insurance, boat insurance, and other policies. 

How Does Umbrella Insurance work?

Umbrella insurance simply covers you where your primary meets its limits. It will cover the difference between what your insurance covers and what you owe. It also provides coverage that areas of typical insurance do not. Such as it may cover your legal fees and damages should you get sued.

What does Umbrella Insurance cover?

Umbrella Insurance typically covers you and your family/household against lawsuits concerning damage to other persons or property. It also covers a variety of claims, such as landlord liability, false imprisonment, libel, and slander. But it does not cover your personal injuries and damages to your property. It will not cover injuries of others or property damage from your business. 

Do you Need Umbrella Insurance?

You may want to consider this type of coverage if you own property or other considerable assets. It could be important to have if you are a public figure, landlord, or serve on the board of a nonprofit or other similar organization. It is also beneficial if you engage in extreme sports where you can easily injure others or own items, such as a pool or trampoline, where others can get hurt.

Umbrella insurance is a great way to have extra back up when you are in a hard place. It can be the difference between financial ruin or freedom when having fallen on hard times. If you think umbrella insurance is right for you, talk to your financial advisor today.


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