What is Umbrella Insurance Coverage?
Umbrella insurance is coverage for people who might face lawsuits and huge legal settlements. It’s not the type of coverage that a typical person would get. Some insurance companies don’t provide enough coverage for certain events – such as civil and criminal lawsuits. In those situations is when umbrella insurance pays the difference.
Who Needs It?
Umbrella insurance is mostly for wealthy individuals who might lose a significant portion of their assets due to lawsuits or monetary disputes. People who own a significant amount of expensive property, like real estate, aircraft, boats and luxury cars, might want umbrella coverage. People with collectible artwork and expensive jewelry can benefit as well.
To put it bluntly, umbrella insurance provides supplemental compensation for other insurance policies that you already own. Insurance companies limit the amount of money that can be withdrawn to pay for claims. Wealthy people have the responsibility of paying extra money in settlements that aren’t fully covered by their insurance policies.
Umbrella insurance is activated usually during a liable case. For example, a person responsible for someone’s personal injuries might be ordered to pay for medical bills. The insurance can help cover long-term expenses of individuals who have been permanently disabled. Libel and slander are common issues business people deal with. Such cases often result in hefty lawsuits, and umbrella coverage can help pay for the damage.
If you’re at risk for lawsuits, then umbrella insurance is something you should consider. People who have a lot of money can become targets for lawsuits. If you are ordered to pay large sums of money, then your existing coverage might not cover the entire cost. Umbrella insurance helps keep you from losing all of your money and going bankrupt.