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Umbrella Insurance

A Primer on Umbrella Insurance
Introduction
Umbrella coverage provides liability protection over and above the policy limits of a standard auto or homeowners insurance plan. When one’s existing liability coverage doesn’t provide in time of need for someone’s injury damage claims, when the policyholder is at fault, whether due to a motor vehicle crash or some type of an accident in the home, this is where good umbrella insurance coverage can step in to help in saving one from financial ruin.
Who Benefits
Contrary to what most would believe, a person does not need to be extraordinarily wealthy to enjoy the protection of an umbrella insurance policy. Simply owning a home and being the breadwinner is enough to offer good reason for such added protections. There are always chances, for example, of one falling asleep at the wheel and consequently causing a crash or witnessing a visitor slip and fall on your home premises leading to a lawsuit. Whatever the case may be, without proper coverage everything you own and all your monetary assets can be jeopardized. Normally, the usual auto or homeowners insurance will compensate for the initial $300,000 of costs. The obvious issue is that one will be liable for any amount that exceeds such a policy limit.
How Umbrella Coverage Assists
In addition to what is mentioned above, good umbrella insurance coverage will provide protection for the gaps in a standard homeowners’ or auto insurance policy. The following are some cases in which Umbrella Coverage helps:
• Slander & Defamation
• Malicious Prosecution
• False arrest & imprisonment
• Mental Anguish
With a lawsuit, those who are sued need to come up with substantial payment for legal costs. This can be true even if one wins the lawsuit. However, when carrying umbrella coverage, the policy can extend an appointment of a legal team including compensation for such things as court expenses and for the actual legal representation as well. If a judgment is made against the policyholder for a substantial sum, umbrella coverage will help protect him or her with compensation for judgments that exceed standard coverage.
How it Functions
Umbrella policies come in million dollar increments. Often the first million dollars of umbrella coverage will usually equal a $300 annual premium payment. Each additional million dollars of coverage will mean another $100 or so.






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