When buying car or homeowner’s insurance coverage, ever wonder what happens if your insurance maxes out and you have assets? It is not hard to imagine the only vehicle insurance you find offers a maximum of $300,000 liability coverage. The only problem is if you were to cause injuries in a car accident that total $600,000. Rather than get sued and be forced to sell assets to come up with the difference, you turn to an umbrella policy.
Umbrella policies cover the gap that homeowner’s and vehicle coverage may leave when those policies are tapped out. Umbrella coverage is interesting because it additionally may guard against liability involved with liable, slander, false arrest, vandalism and even invasions of privacy too. It makes you wonder if journalists are the biggest customer base for these policies.
The umbrella insurance follows you outside the house and outside the car, into the gray areas of life too. Umbrella insurance protects kids at college whose computer gets stolen from their dorm room. It also provides coverage for a homeowner whose dog gets loose and sadly attacks the neighbor’s kid who wanders into their yard to play every afternoon.
Another area of coverage the umbrella policy includes is for liability involved with renters. Normal landlord policies only cover the structure, leaving behind plenty of room for liability lawsuits. The umbrella policy is invaluable for individuals who rent out their investment houses and apartment buildings. It is another layer of protection for people who would like to keep their assets, rather than be sued.
In general, to buy an umbrella policy requires the insured should have approximately $250,000 in vehicle liability lines of coverage and approximately $300,000 in liability protection as part of their homeowner’s policy.
The major benefit of an umbrella policy is that it is added protection against getting sued when you are at fault for causing harm to other people. Otherwise, you could lose your assets that you have amassed, because homeowner’s and vehicle policies may carry fairly low liability coverage levels.