A Short Guide To Umbrella Insurance

Almost all insurance policies have what are called limits.  These limits are essentially the amount of money that your insurance policy will cover in case something goes wrong.

However, what happens when something goes wrong and the overall cost is higher than the limits of your existing insurance policies?  In situations like these, you will be forced to cover the remaining costs out of pocket.  That is unless you have umbrella insurance.

What Is Umbrella Insurance?

Umbrella insurance is essentially extra insurance that provides coverage that extends beyond your existing insurance limits. For example, let’s say you have insurance coverage with a limit of $300,000 but you get into a car accident and cause $500,000 worth of damage. In this situation, umbrella insurance would cover the extra $200,000. Umbrella insurance can provide coverage for a variety of things, including injuries, property damage, lawsuits, and other liability situations.

What Cannot Be Covered By Umbrella Insurance?

Umbrella insurance can cover many different things but there are some exceptions.  For example, if you cause damage to your own personal property, it usually cannot be covered by umbrella insurance.  In addition, criminal or intentional actions that cause damage to someone else or their property cannot be covered.

Sometimes your existing insurance policies just don’t have high enough limits to cover the entire cost of an incident.  Luckily, umbrella insurance can help you avoid having to pay out of pocket.