Personal umbrella insurance provides protection when other policies have been exhausted in the event of a lawsuit. It can cover liability in large amounts and is recommended for those with highly valued property. It is advised to shop around for policies and discounts may be available when purchasing multiple types of insurance.
If a person falls asleep at the wheel while driving home, it could cause an accident that seriously injures multiple people. Someone who has been meaning to fix the deck in their backyard might not do so before a guest walks through it and falls. In these cases, the injured parties can sue the person responsible for a large amount of money. Auto insurance will offer some coverage in the first case, but will only pay the amount of liability that the policyholder owns. Similarly, an owner’s policy will pay the liability rate that the owner has purchased. In these cases, personal umbrella insurance, sometimes also called personal liability insurance, can help the person survive a lawsuit without losing everything they own.
Personal umbrella insurance acts as protection once an individual’s other policies have been exhausted. In no-buy cases, causing an accident may mean the person responsible must turn over all of their tangible assets to have their value assessed. Most of the time, the property being assessed is the home, cars, and boating property that the person owns. Other property, such as jewelry and property, may also be part of the money that a person in a lawsuit can claim. In addition, a portion of the person’s salary may need to go to successful claimants for many years, if not for the rest of the person’s life.
Even if a lawsuit doesn’t result in a huge award, court costs are often high and exceed the amounts that auto or home insurance will allow. General insurance will also step in to allow reimbursement of court costs without the policyholder needing to sell assets to cover these costs.
Personal insurance coverage and costs vary by company. Most require a customer to have a defined amount of liability on an auto or home policy. If you do not meet this requirement, he will be personally liable for the difference between the limit of liability he should have carried and the limit he does meet.
Most policies can insure liability in large amounts, often starting at millions of US dollars (USD). Policies can run into the multi-millions, and what the policyholder owns should determine how much they buy. Someone who has few assets may find that this type of coverage can actually attract rather than discourage lawsuits. A claimant knows that he or she can get more money as a result of coverage.
However, with highly valued property, personal umbrella insurance is a must. The investment in such policies is generally not high, and can translate to approximately $100 USD a year for $1,000,000 USD in coverage. With the adjudication of claims on an upward trend, it’s probably best to buy a policy that can offer $5,000,000 of coverage, although people with fewer assets probably won’t need as much.
Financial experts often recommend that most people don’t skimp on this type of insurance, suggesting that people checked should shop around and purchase a policy. Discounts may be available if the policy is purchased through the same company that provides a person’s auto or home insurance. Companies often offer reduced rates when multiple types of insurance are purchased.
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