The modern world is filled with risks. From car accidents to slip and fall incidents in the home, the possibility of being sued is a real possibility every person needs to take into account. Nearly everyone accounts for this risk by buying insurance. Personal umbrella insurance takes this concept to a new level.
Insurance is a staple of any financial plan these days. There is an inherent weakness with every policy, however. Let’s consider your car insurance. It covers you in case of a collision with another party. A typical policy might pay out up to $50,000 per claim with a total payout per year of $100,000 regardless of the number of claims.
Let’s assume you are late to work one morning. You try to make it through a yellow light, but it turns red. Traffic proceeds from the crossroad and you hit someone. Your car insurance will pay up to $50,000 to make them whole, but what if it is going to cost more than $50,000? What if they sue you for $250,000? Now you have a problem.
Every insurance policy has a limit. This “policy limit” defines the maximum amount the insurance company will pay out on claims made against you and the policy. Claims can often exceed these limits in worse case situations, leaving you on the hook for any additional amounts due.
Personal umbrella policies are designed to address the shortcomings of policy limits. Umbrella policies cover liability claims in excess of the policy limits for your primary insurance. In our car accident example, the umbrella policy would pay any amounts due in excess of the $50,000 covered by your primary car insurance policy.
Umbrella policies let you sleep peacefully at night. It is as simple as that. If you have a child who has just started driving, you can sleep blissfully knowing the umbrella policy will cover any disasters caused by their inexperience behind the wheel. So request an umbrella insurance quote now.
Umbrella policies are typically written in increments of a million dollars of coverage. This means you can purchase one million, two million or more in coverage in addition to your underlying policies. If you purchase a million dollars in coverage, for example, the policy would cover any liability claims in excess of your $50,000 car insurance policy up to $1,050,000.
Umbrella insurance cost: Umbrella insurance policies are surprisingly inexpensive, which makes them a wise choice for most individuals. The premiums are usually shockingly low because your primary insurance policies are usually going to cover any claims. Given this, the insurance company writing the umbrella policy faces a low probability that it will ever have to pay on the policy. In exchange for this low payout risk, the insurance company provides you with low premium costs.
Is purchasing a personal umbrella insurance policy a smart move for you and your family? Absolutely. You gain the peace of mind of knowing you are covered should things go very wrong and at a very low premium cost. Contact us today for a no-obligation quote on a personal umbrella policy for your current situation.