You believe you have all the insurance coverage you need, and hopefully, you are correct. However, there may come a time when you need access to more money than the policy pays out. If this happens, you have little choice but to come out of pocket to make up for the shortfall. When you’re talking about big bucks, that might not be so easy to do. If you haven’t heard of an umbrella liability policy, you’re missing out on an opportunity to cover the shortfall of other insurance policies. Take a look at three things about this type of plan.
1. Umbrella Policies Provide Extra Protection
An umbrella policy functions just like it sounds – it provides protection that extends over anything else you may have. The policy goes into effect when you reach liability limits on your primary coverage. For example, according to a palm coast insurance agency, if your homeowner’s insurance policy limit is $100,000, but your home sustains $150,000 worth of damage, your umbrella policy would kick in to pay the $50,000 shortfall.
2. Umbrella Policies Help Cover Litigation Costs
The most critical role of an umbrella policy is to take care of any litigation costs. Auto accidents can cost hundreds of thousands of dollars in some cases, depending on the amount of damage caused or the severity of the injuries sustained. Once you hit your auto insurance policy limits, you would be on the hook for further litigation costs. Umbrella policies have you covered in these instances.
3. Umbrella Policies Cover Businesses
Perhaps you run a business and want to up your insurance coverage. As in personal policies, umbrella plans will spring into action to make up the difference between litigation costs and what your primary policy covers. As a business owner, this may mean the difference between going belly up due to a customer lawsuit or staying in business.
Having a second policy to protect you against unforeseen costs and expenses arising out of an accident is something worth considering. Umbrella policies can give you that extra peace of mind your family needs.