Umbrella Insurance - Althea Johnson Agency - Hicksville, NY

Umbrella Insurance

Good Umbrella Insurance Coverage

What is it?

It is not uncommon to find property owners reeling from the effects of being held liable for injuries and property damage for which they are determined to be at fault or from accidents, such as slips and falls, that happen on their property. Umbrella insurance is specifically designed to provide the protection of extra liability coverage where normal home, auto, business, boat and motorcycle insurance will often fall short. An umbrella policy is not offered as a stand-alone policy because it will only take effect once a typical insurance policy has exhausted its limits in compensating for a claim.

How does it work?

For instance, if a person sues for damages resulting from a car accident where bodily injury and/or the destruction property exceeds the policyholder’s normal $500,000 in existing liability protection, this coverage will kick in and cover the difference, up to the supplemental policy limits. Let’s say an individual wins a lawsuit that results in a $1 million award. Obviously there is a $500,000 difference. With good umbrella coverage, the policyholder who is held liable for causing the accident is then protected from having to pay the additional $500,000 out-of-pocket.

Umbrella coverage will usually provide, at a minimum, $1 million in protection for a relatively reasonable annual premium of anywhere from $150 to $300. Each added million of coverage will then cost $50 to $75 in additional annual premium payments. Not only does this coverage protect the assets of the policyholder being sued for causing injury or damage to property, but it will also compensate up to $100,000 for legal defense expenses as well. It also provides protection to the insured should they be a part of an incident while driving a rented vehicle, this would often include autos and boats.

Big Benefits

Many mistakenly believe that umbrella insurance is meant just for the wealthy. Indeed, it is really helpful for those with large assets, but it is also for anybody who wishes to protect what they have worked hard to accumulate, no matter how modest. When someone is shopping for umbrella coverage, they should first figure out their net worth and then buy a policy that is around $1 million more than their assumed net worth. (One can always buy additional coverage, should they feel the need.) Call an insurance agent today to find out more about obtaining the proper coverage for your situation.