How to Buy an Umbrella Insurance Policy

An umbrella insurance policy applies to both homeowners and business owners. The policy extends the limits of the liability on the policy up to $3 to $5 million. Even the small business owner or a homeowner that has small values in terms of the home and contents might do well to get an umbrella insurance policy. These policies cover catastrophic events such as lawsuits or acts of nature.

Instructions

Difficulty: Moderately Easy

1. Check with insurance agents that specialize in the area of insurance you are interested in. Umbrella insurance policies are available not only for business owners and homeowners but also for automobiles and watercraft. Get several quotes from several insurance companies.
2. Assess your current homeowners, business owners or auto insurance coverage limits before purchasing an umbrella insurance policy. There are certain limits your policy must have in order to apply for umbrella insurance. For auto insurance, if you have a teenage driver on your policy, a wise choice is to get umbrella insurance coverage. If there is an accident, the umbrella coverage will activate in the event of damage, injury or possibly death resulting from an auto accident.
3. Find out if the umbrella insurance policy covers false arrests and slander.
4. Purchase at least $1 million of umbrella insurance. This covers any lawsuits or extenuating damage resulting from accidents or excess medical coverage to another injured party or parties. If not certain how much you should have, discuss it with your insurance agent.
5. Obtain a sample umbrella insurance policy, and check out everything that is covered. You want as much of your lifestyle or daily activities covered as much as possible. If you do something as a hobby that is not covered, there are always umbrella insurance companies that will cover it. If you are ever turned down for umbrella insurance, there are also insurance companies that specialize in high risk cases for umbrella insurance.
6. Protect yourself from gaps in insurance by keeping all of your policies (homeowners, auto, small business, watercraft and umbrella) with the same insurance company and if possible the same insurance agent. This prevents any gaps in coverage from one company to another.

Tips & Warnings

• Shop around, and get free quotes. The average umbrella insurance policy should cost approximately between $250 to $300 more per year.
• Check the liability on each policy you own before purchasing an umbrella insurance policy. There are certain limits that must be met before you can apply.