About Umbrella Insurance Policies

For someone looking for added coverage over the limits of their homeowner's and auto insurance policies, an Umbrella Insurance Policy would be the best answer. This type of policy is insurance against the limits of other insurance. The significance of this is that Umbrella policies help protect loss of future assets and other income. There are certain considerations you should take into account when determining the amount of coverage. There are also certain warnings which should be watched for.

Identification

Umbrella insurance policies obtained their name because they act like an umbrella which covers other liability policies you have by providing extra coverage. Some examples of Umbrella Insurance Policies and when they are most effective are the following:
• An automobile accident where you are sued under your auto insurance policy.
• There is a slip and fall on your property where you are sued under your homeowner's policy.
• There is damage caused to another property from an item which came from your property such as a fallen tree; which you are then sued under your homeowner's policy.
Single liability policies such as these will not cover the entire cost. This is where a "catch-all" policy such as an Umbrella Insurance Policy is used.

Function

Umbrella Insurance Polices are designed to give added liability coverage above and beyond the limitations of policies such as homeowner's, auto and watercraft. This protection is designed to start when these other policies have reached their limits of payouts. This policy is also used when you are sued for something which is not normally included in traditional insurance policies.

Significance

Umbrella Insurance Policies protect you from severe losses. Policies of this type cover your total and future assets. Umbrella insurance also protects loss of any future inheritance or inheritance which may be passed to your children. There is also the coverage of future income which could be jeopardized if your assets are not enough to cover a settlement.

Considerations

For someone considering an Umbrella Insurance Policy, questions and issues should be addressed to determine the amount of additional coverage required. Do you entertain a lot? Do you operate a home business and have employees or clients coming into your home on a regular basis? Do you live in an upper-class neighborhood where lawsuits are likely?
Other recommendations which may warrant purchase of an insurance policy include if you hire out your house or are a part of a holiday exchange program, if you have people watching your house while you are away, and if you have a housekeeper, gardener, or other people who work at your home.

Benefits

Umbrella Insurance Policies pay in the range of $1 million up to $5 million on top of basic policies. You can set the amount of coverage. The payments for this type of policy range between $200 and $300 per $1 million of coverage.

Warning

Most insurance companies will not sell you a policy of this type unless you have both homeowner's and auto insurance with them. The excess liability these policies provide covers a range of issues outside of homeowner's and auto issues as well, such as mistaken arrest, false custody, slander, unlawful access and deportation.