Shield Insurance Agency Blog | Umbrella Insurance | Commercial Insurance
When it comes to protecting your assets and ensuring financial security, having the right insurance coverage is crucial. While most people are familiar with auto, home, and health insurance, there is another type of policy that often goes overlooked – umbrella insurance. In this blog post, we will explore what an umbrella insurance policy is, how it works, and why it is an essential addition to your insurance portfolio.
What is umbrella insurance?
Umbrella insurance is a type of liability coverage that provides an extra layer of protection beyond the limits of your existing insurance policies. It is designed to safeguard your personal assets and provide financial security in the event of a lawsuit or significant claim. While your primary insurance policies, such as auto or homeowners insurance, have coverage limits, an umbrella policy offers additional coverage that kicks in once those limits are exhausted.
How does it work?
Let’s say you are involved in a car accident where you are at fault, and the other party suffers severe bodily injury. Your auto insurance policy has a liability coverage limit of $300,000, but the injured party’s medical expenses, legal fees, and other damages amount to $500,000. Without an umbrella policy, you would be responsible for paying the remaining $200,000 out of pocket. However, if you have an umbrella insurance policy with a coverage limit of $1 million, it would cover the remaining $200,000, saving you from a significant financial burden.
What does it cover?
Umbrella insurance provides coverage for a wide range of situations, including bodily injury, property damage, and personal liability incidents. It also offers protection against claims such as libel, slander, false arrest, and invasion of privacy. This comprehensive coverage ensures that you are protected from various risks and potential lawsuits.
Coverage limits and excess liability
Umbrella policies typically have coverage limits ranging from $1 million to $5 million or more. These limits represent the maximum amount the policy will pay out in the event of a claim. Once your primary insurance policy reaches its limit, the umbrella policy kicks in to cover the excess amount, hence the term “excess liability.” This additional coverage provides peace of mind and ensures that your personal assets are shielded from potential lawsuits.
Misconceptions about umbrella insurance
There are several misconceptions surrounding umbrella insurance that prevent people from considering it as part of their insurance portfolio. One common misconception is that umbrella insurance is only for the wealthy. In reality, anyone can benefit from an umbrella policy, regardless of their income or assets. It is an affordable way to protect yourself and your family from unforeseen circumstances.
Another misconception is that umbrella insurance is only necessary for those with high-risk lifestyles. While it is true that individuals with certain professions or hobbies may face higher risks, accidents can happen to anyone. It only takes one incident to result in a devastating lawsuit that could wipe out your savings and put your assets at risk. Umbrella insurance provides an extra layer of protection for everyone, regardless of their lifestyle.
Why do you need an umbrella policy?
Having an umbrella insurance policy offers numerous benefits, including:
1. Asset protection: Your personal assets, such as your home, savings, and investments, are shielded from potential lawsuits.
2. Peace of mind: Knowing that you have an extra layer of protection provides peace of mind and allows you to focus on enjoying life without worrying about financial risks.
3. Comprehensive coverage: Umbrella insurance covers a wide range of situations, ensuring that you are protected from various risks and potential lawsuits.
4. Risk management: By having an umbrella policy, you are effectively managing your risks and protecting yourself from unforeseen circumstances.
5. Legal protection: In the event of a lawsuit, an umbrella policy covers legal expenses, including attorney fees, court costs, and settlements.
How to get an umbrella insurance policy?
If you are interested in obtaining an umbrella insurance policy, it is essential to work with a reputable insurance agency that understands your needs and can provide you with the best coverage options. Shield Insurance Agency represents over 40 insurance companies and can help you find the right policy that fits your requirements and budget. Contact Shield Insurance Agency at (616) 896-4600 for a free quote today or start the quoting process by visiting this LINK, and an agent will be in touch soon.
In conclusion, an umbrella insurance policy is a valuable addition to your insurance portfolio. It provides an extra layer of protection, safeguards your personal assets, and ensures financial security in the event of a lawsuit or significant claim. Don’t wait until it’s too late – consider getting an umbrella policy today and enjoy the peace of mind that comes with knowing you are well protected.
