Umbrella Insurance

What an umbrella policy actually does is really quite simple. It provides extra coverage over and above one’s existing policies. It can fill in the holes where certain aspects of life are less covered than others, filling in the gaps for that which is not already in existing policy coverage. For example, if an owner of a small business was missing earthquake insurance but did already have umbrella coverage, in some cases the umbrella policy would compensate for loss resulting from seismic activity. It is perhaps best known, though, for kicking in after other policies have been fully used up. If a person’s car insurance coverage was limited to say $20,000 but he or she got into an accident where the total costs exceeded that amount by another 10,000 dollars, the auto insurance policy would pay the first $20,000 and then the umbrella policy would pay out the balance of the total (the $10 thousand that otherwise would have had to be paid out-of-pocket).

Umbrella coverage can extend a person’s or a company’s liability coverage. This is extra added protection is for what it is famous. Keep in mind that there are occasional exceptions to this rule, for example a business umbrella insurance policy may not provide coverage for a private individual’s car insurance but may very well bolster a company’s commercial insurance policy. There is a variety of umbrella insurance policies that are best suited for different industries. For example, there is an umbrella policy that can be fashioned and tailored for those who work within the medical profession, where liability issues are common. Regardless each policy functions in really the same way.

An umbrella policy can be less costly and quite flexible. For example, rather than going to the expense and trouble of extending auto, home, and business insurance coverages separately, one could simply purchase a single umbrella policy to cover them all. The peace of mind inherent in umbrella insurance is priceless.