If you go an extended amount of time without making a claim on your home or auto insurance, it might seem like you are not getting value for your money. Adding even more coverage to your policy through an umbrella policy? Who would ever need that? However, insurance is designed precisely for these scenarios when your life changes unexpectedly and you can’t deal with sudden financial obligations. Umbrella insurance policies allow you to add even more coverage to an underlying policy to ensure any scenario in the future is paid for in full by your insurance provider without shifting the burden onto you.
Umbrella Insurance Policies – The Basics
An umbrella policy provides additional coverage that pays for much higher auto or homeowner’s insurance claims when the numbers start to reach 1 to 5 million dollars. These policies will usually kick in following significant disasters or freak accidents, like a multi-car pileup, that you were found liable for. A situation like that can easily have multiple parties all simultaneously claiming more money than your basic level of auto insurance provides. Umbrella policies are also helpful if you possess assets that cost above and beyond what you would receive in the event you make a claim following a disaster.
Who Needs Umbrella Policies?
While not everyone needs every single type of insurance imaginable, there are enough situations where umbrella policies are useful that most people can find a reason to purchase them. Let’s talk about some unexpected ways routine everyday activities can put you at risk for lawsuits and insurance claims.
Carpoolers and Commuters – Driving long distances every day, especially if you have other passengers in your car, puts you at a much higher risk of seeing expensive, exorbitant claims. Carpooling and extensive travel with hundreds or thousands of other drivers on a highway increases the likelihood of being found liable in an accident involving others. Furthermore, if you drive a nice car and have a higher level of coverage on your vehicle, that, too, can be used against you. In these situations, you can often be targeted for higher claims if a victim finds out you have a high net worth. Even if the people you carpool with are friends or family, upping your coverage ensures all of your bases are covered.
Homeowners – While this category seems broad, umbrella insurance can cover a wide variety of topics and is therefore applicable to many people. Anyone can sue you at any time, and if you are found liable, you might end up paying an extraordinary amount of money. If you have kids, the actions of your kids might bring lawsuits your way. Your dog escaping and injuring a neighbor is also a freak accident that umbrella insurance can help with. If the cost of umbrella insurance for your home is not very expensive due to your age, risk factors, and location, adding it as an additional layer of coverage can help ease your mind about any possible complications in the future.
The cost of an umbrella policy averages about $100 annually per million dollars of coverage. Depending on your demographics, you can expect to pay more or less than this average. Your age, region of residence, career, driving record, and credit score may be considered, depending on your insurance company’s parameters. Also, your coverage limits for your other policies may need to be adjusted.
Anderson & Associates Insurance Group proudly offers comprehensive coverage to Sarasota and Bradenton area families. Whether you need health, auto, umbrella, homeowner’s, or business insurance – we’ve got you covered.
