Umbrella Insurance

What is Umbrella Insurance?

Umbrella insurance is not a well-known type of policy. The purpose of this policy is to provide protection above and beyond that which is provided by traditional policies. Because of this, umbrella insurance is not a policy intended to replace another form of policy. For instance, you wouldn’t get this type of policy and then drop your health insurance.

In short, an umbrella policy comes into play when an existing insurance policy is spent. For instance, if you get into a boating accident and your coverage is exceeded. The umbrella policy would pay what remains after the main insurance policy pays its part.

This type of policy is generally used in conjunction with car insurance, home insurance, RV insurance, and other types of coverage. Examine your policies to see how much coverage you have, and then consider how much if any umbrella insurance is needed.

Who Needs this Coverage?

Anyone can benefit from an umbrella policy. It reduces the amount you have to pay in out-of-pocket expenses, so anyone can benefit from that. Just remember it only works when one of your existing policies has reached its limits. If you got into a car accident and caused $30,000 worth of damages, but have $20,000 worth of liability, then the remaining $10,000 would be your responsibility. Umbrella coverage could pay the $10,000 so you would not have the expense.

Umbrella insurance is simply a way to purchase additional coverage that can be used with several insurance policies.