Umbrella Policies: Above & Beyond Your Standard Insurance

If you've ever had a serious accident, you know the financial and physical repercussions that follow. Whether injured in your automobile, at work, at home or one of a million other places, a serious injury can deplete your resources and leave you wondering how you'll ever make ends meet, let alone pay your bills.

But this ripple effect reaches others, too. What if someone else dies, or is gravely injured in the accident? Are you legally responsible for their expenses, too?

If you're at fault, the short answer is "yes." But that's why you have auto and home liability insurance: to protect yourself and others from the unexpected.

However, every insurance policy has limits. What happens when you pass them, the bills are still piling up and you're hopelessly in debt?

That's where an umbrella policy comes in. So called because of its function, umbrella insurance "covers" you where your home or auto insurance liability coverage leaves off, paying for items like medical bills, lost wages, legal fees and property damage.

Consider it financial catastrophe protection—and psychological comfort—just when you need it most.

Minimizing Cost

Sold separately from other insurance policies, umbrella insurance goes above and beyond standard auto or home insurance by providing additional liability coverage at a reasonable price. In fact, a $1 million policy of this type can be purchased for only $150-$300 per year, according to the Insurance Information Institute’s answer to the FAQ Should I purchase an umbrella liability policy? (III).

The actual rate you pay depends, of course, on the coverage level you choose, the insurer you pick and your own personal "risk factors" (things like your driving record and credit history). But overall, this coverage is relatively inexpensive and provides extra protection most of us need.

Who Needs It?

If your assets exceed your insurance coverage, you're not fully protected and should consider extra protection.

But how can you know for sure? Follow these steps to find out:

Step #1: Add up your assets. Include savings, your home's value, stocks and bonds, retirement monies, 401k funds and the like.

Step #2: Check your auto and home owner policies for liability coverage limits.

Step #3: If your current limits aren't large enough to cover your assets, you need an umbrella policy.

If you find yourself in this dilemma, talk to a licensed insurance agent for advice. Agents like those on the InsureMe network can help you decide how much extra coverage you need—and provide the most affordable quotes to get you there.

Covering the Unexpected

To help you understand how this additional policy works, below are some theoretical situations in which it would come in handy:

• Someone slips and gets hurt on your property
• You're sued for negligence following a car accident
• A tree on your property falls on someone or their car
• You must hire a lawyer to defend yourself against libel or slander

Since no one ever expects these things to happen, it's wise to prepare now with an umbrella insurance policy. It might just keep your budget intact—and you and your family safe and dry.

Protecting Your Interests

Did you know that, without enough liability insurance, you could lose your home, see your assets seized, lose your inheritance, have your wages garnished and still owe your debtors money?

Don't wait to buy this protective policy. Protect yourself and your resources from the unfortunate today.