Umbrella Insurance

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An umbrella insurance policy is a valuable tool to manage your risk.  Most people may not even be aware of what an umbrella insurance policy does.  The basic concept is that an umbrella policy supplements your auto and home insurance liability policies to give you more protection.

Your personal insurance policies are set up with liability limits for each type of risk.  Your homeowner’s policy has its own limit and so does your auto policy.  These liability limits are very important because they will pay a settlement to someone who suffers injuries or property damage due to your negligence.  If you purchase an umbrella policy, it will provide an additional amount of coverage over and above the limits of your homeowners and auto policies.  That is why an umbrella policy is often referred to as an excess personal liability policy because it covers you for claims, which may exceed your other limits.

This aspect of umbrella insurance is very important because if you become responsible for a claim that results in damages that exceed your limits, you could become personally liable for the difference.

You may be wondering if an umbrella insurance policy is necessary for you.  When you set up your limits for your homeowners insurance and your auto insurance, it is important to purchase as much insurance   coverage as you can.  If you do that from the start, why would you need an excess policy?  One reason is that for the right individual, an umbrella policy may be a more affordable way to obtain more liability coverage than simply increasing your homeowners and auto liability limits.

An umbrella policy covers more than just injuries or property damages.  It can also protect you from incidents that result in personal injuries, which include defamation, libel and slander cases.  These cases are becoming more common with the introduction of social media issues where everything you say on the internet becomes a publication and this creates a higher risk of libel claims than ever before.

If you have questions about your policy limits, or whether an umbrella policy is right for you, be sure to discuss your options with a qualified insurance professional today.