Umbrella insurance is a back-up insurance policy. It comes into play only after you’ve reached the limits of what your other insurance policies cover.
As an example, let’s take a look at why drivers should have an umbrella insurance policy.
Let’s say you’re driving and lose control of your car briefly. In that split-second, your car strikes another car, careens off the road through a fence, and strikes a building, damaging its foundation.
The driver of the other car is thrown from the car and badly hurt, requiring surgery and months of physical therapy. The fence is ruined and must be replaced. The building requires major repair before it can be occupied again.
Your injuries are pretty terrible, as well.
You have auto insurance and that will pay for a lot of the damage you’ve caused, which is good. But, your auto insurance won’t pay for all of the damage you’ve caused. Auto insurance coverage only takes you so far.
This is where umbrella insurance kicks in.
Umbrella insurance pays out to the driver of the other car for medical bills and lost wages; to the owner of the building for fence repair and structural damage; and, to the other parties harmed in the accident.
It’s common to have umbrella insurance for $1 million, $3 million, or $5 million to protect against events like this. Without the insurance, you could lose your car, your home, and a large percentage of your future wages.
If you drive a car, umbrella insurance will protect your future life.
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An insurance claim is an official request you make to an insurance company, asking to get paid for damages. Insurance claims can be made for any reason that’s a part of your insurance policy. When you have homeowners insurance, you can make an insurance claim after a fire in your home; after there’s been theft […]