A Quick Guide to Umbrella Insurance and Why Do You Need It?

There’s a sense of security that comes with homeowner insurance, car insurance, life insurance, and whatever insurance you have got going on at the moment. However, all of these insurance policies may be unable to rescue you on the day of trouble. The reason is not far-fetched, as you may not have coverage for “the chaos.” With a more complex financial situation and increasing net worth comes the need for umbrella insurance.

What’s an Umbrella Insurance?

Otherwise called an excess liability insurance, this insurance policy helps cover the gaps of all your active insurance policies. Let’s assume the claims for damages surrounding your car accident is beyond the limit of your auto insurance policy. Unfortunately, your policy can cover you only up to that limit, which means you are liable for the rest of the damages, which you’ll have to pay out of pocket. Umbrella insurance will cover this remaining liability. An umbrella insurance is the fail-safe, the icing on the cake that complements all your existing insurance policies as well as protects your personal savings and assets.

How Much Does an Umbrella Insurance Cost?

An umbrella insurance could cost as much as $300 annually for people with basic coverage, and coverage starts at $1,000,000 but can go up to $5,000,000 for people with bigger policies. You’d be offered this policy as long as you keep your minimum coverage intact on other policies. Often, people fail to recognize the saving grace aspect of an umbrella insurance policy. They may not be aware that the idea of umbrella insurance emerged from companies understanding the pain of customers who couldn’t be covered fully when they made a claim on an insured risk.

Who Should Take up an Umbrella Insurance?

While no one would ever force you to take up an umbrella insurance policy, your financial adviser would definitely advise you to take up one.  An umbrella insurance is an urgent need for:

  • People who have assets that need protection. If you’d rather foot the cost of an umbrella insurance than consider the odds of a claim that doesn’t sufficiently cover the replacement cost of your assets, an umbrella insurance policy is important for you.
  • People who have a property that visitors can get injured on. If you own any property or assets that have the potential ability to cause damage to another person or their property, umbrella insurance is perfect for you. The nature of these damages is such that your insurance policy may never cover them sufficiently in the event of extensive damages.
  • People who are responsible for others (i.e., a landlord) and things. If you’re responsible for people and things, you’re better off taking an umbrella insurance policy. This way, you can settle lawsuits or costs that arise from damages without straining yourself financially.
  • People who are prone to risks over time. If you are prone to a risk you already have coverage for, an umbrella insurance policy can ensure you always have comprehensive coverage when these risks happen.

With an umbrella insurance you can increase your deductibles and lessen the premium on your other insurance policies. Do you have additional questions about umbrella insurance? Contact the experts at VGW Walker Insurance in Texas today.