What Is Umbrella Insurance?
Topics: umbrella insurance, excess liability, umbrella liability
At some point, you have probably heard of umbrella insurance, but have no idea what it is. Well, first off, it does not cover the umbrella you protect yourself from the rain. It is a figure of speech. An umbrella policy is designed to shield you from almost everything that your home and auto insurance does not, as well as fill in gaps in coverage when the limits of your regular policy are exhausted.
Every day, there are personal lawsuits filed against ordinary citizens, with the reasons ranging from the frivolous to the justified. When and if this happens to you, you need to be prepared. More often than not, people are sued and have no extra protection to block the plaintiff from going after their personal assets in the lawsuit. To protect yourself from such a quandary, you need to have umbrella insurance.
An umbrella is often referred to as excess liability. This excess liability coverage kicks in when the underlying limits on your home or auto policy have been exhausted, or if you are sued personally for something that neither your home nor your auto insurance covers. Depending on the company, you can purchase anywhere from 1 to 5 million dollars worth of excess coverage, sometimes as high as 10 million. The amount of coverage you select really depends on how much you are worth. If you have 5 million dollars worth of personal assets, you should get a 5 million dollar umbrella. It is not uncommon for someone to buy a 5 or 10 million dollar umbrella policy even if that number far exceeds their net worth, because the coverage is so cheap to buy.
Most insurance companies will not offer you the coverage unless you have both your home and auto already insured with them. Also, the insurer will require that you maintain a certain level of liability on the home and auto policies in order to qualify for the excess policy. Usually, you must maintain at least $250,000 of bodily injury liability per person, $500,000 per accident, and $100,000 for property damage for your autos, and $500,000 of liability for your home.
The coverage is cheap. It is possible to obtain 1 million dollars worth of excess liability for as little as $120 dollars. The more cars and homes you have, the higher the price for the insurance, but the cost is still low. In addition to your home and cars, liability associated with any other conveyances you may have, such as boats, motorcycles, and other recreational vehicles, may also qualify for coverage under the umbrella, depending on the insurance company.
You are probably wondering when the umbrella would actually come into play. Here is an example: If you are involved in an auto accident where you crashed into a pedestrian who was walking on the sidewalk, resulting in medical expenses for that person that costed more than what your auto policy covered, the umbrella would be used. Or, if that pedestrian then decides to sue you for negligence and seeks punitive damages, your umbrella can be utilized to cover your legal expenses and to pay any judgements levied against you.
It is also important to understand that the excess liability covers you for all sorts of things that have nothing to do with your cars or homes. Things such as personal injury protection are covered. This includes false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction. Also, some umbrella policies provide coverage for you if you are sued in connection with any charitable boards or organizations of which you are a member. You may have to contact your insurance company and pay an extra premium for this type of coverage.
I hope this has helped illuminate to you the importance of having umbrella insurance. Without it, your personal assets are totally vulnerable in any lawsuit or legal action. Talk to your agent about it and ask how much it costs. Even though multi-million dollar lawsuits are not common, they can happen. So, an umbrella is probably worth it.
Jim Pretin is the owner of www.forms4free.com, a service that helps programmers make email forms.
Previous Articles Highlighter:
What Is Your Investment Risk Tolerance? (1)
When evaluating your risk tolerance, you should first consider what type of person you are. If you like to take risks, then invest accordingly. If you hate to take chances, then play it safe.
Different Mortgage Types Match Your Finance Needs (2)
Those funds will eventually be used for the house. At the end of the term, this money will go to the house. The advantage is that you are not only saving for your mortgage, but also getting life insurance.
Making Your Own Investment Decisions (3)
Next, there are a few statistics that you should evaluate which are also listed on the profile for the company when you look them up online. The two most important statistics to look at are the P/E ratio and the PEG ratio.
Tips So Taxi Driver Accounts Do Not Have To Be Taxing (4)
Household expenses If you run your taxi business from home you can claim a proportion of household expenses as business expenses in the taxi accounts. Household expenses are likely to be disallowed unless they are either specific to the business or a specific area of your home is devoted entirely to your taxi business.
Call Capture Marketing - 3 Tips For Success (5)
Most call capture systems include a way to track your advertising by using different extensions. Use them! There is no better way to maximize the return on your advertising investments than finding out what works and sticking to it.
The Stock Replacement Covered Call Strategy (6)
If a total of 10 calls were purchased (an equivalent of 1000 shares), you would lay out a total of $11,450 to fulfill your stock requirement on this buy-write. If you had purchased the stock outright, you would have spent $58,900.
Investment Property Mortgage Loan Basics (7)
You still have to choose wisely. When looking at commercial real estate, there are many factors to take into account, like the business's projected income, local zoning laws and taxes, and the location of the property.
Top Self Employed Tax Questions That Save Money (8)
All running costs incurred solely for the purpose of the business may be deducted as allowable business expenses including goods bought for resale, employee wages, premises rent and overheads, administration costs, vehicle running costs.
Finding And Securing A Commercial Loan Quickly & Easily (9)
Topics: commercial loan, commercial mortgage loan, hard money commercial loan If you're looking to purchase a commercial property, and have doubts as to whether you will be able to qualify for a loan, there is no need to worry.
Reasons To Refinance Now (10)
Fix That Rate: If you currently have an adjustable rate mortgage, you may seriously want to consider refinancing to a fixed rate mortgage. Adjustable rate mortgages are far riskier to the borrow than fixed rate mortgages.
Great Tips For Investing In Bonds (11)
Once you have a small nest egg, it may be time to invest in some bonds. Who Else Wants An Easy-To-Use Guide To Successful Stock And Bond Investing? Click here for FREE online ebook!
Financial Education Needed 'More Than Ever' (12)
Abbi Rouse writes for All About Loans where visitors can apply for a loan online and also focuses on adverse credit loans , and loans consolidating debts for UK Homeowners.
'Understanding' Is Key To Avoiding Financial Problems (13)
When you have a problem, the last thing that you really want to do is to put it all down on paper. But it's very, very important." The Thomas Charles director reported that getting to grips with their financial situation before seeking advice from professional bodies will aid consumers to "listen to what the options are and how they are going to help in that particular situation".
Homeowners 'Urged To Prepare For Winter' (14)
However, regular maintenance, perhaps using cheap loans to fund repairs, can avoid more significant costs at a later date. Crucially, homeowners planning to rely on their home insurance to fund any repairs to their house should be warned that they might not receive the payout they were expecting.
One Of The Best Galveston County Neighborhoods (15)
This incredible neighborhood is set up to be one of the best and most comfortable neighborhoods in the United States, with convenient access to beautiful Clear Lake, an incredible layout and master-planned design, a wonderful town center for the convenience of residents, and a touch of respect for the natural setting in which it is nestled.
The Basic Facts About Secured And Unsecured Loans (16)
To some extent, the lender seeks the comfort of collateral so that the lender's risk is limited as far as possible. In contrast, an unsecured loan is that which is not put up against the borrower's assets, but against the borrower himself.
Sugar Land Subdivisions Promotes Growth (17)
The city is also the headquarters for a number of software, international energy and product forms such as the Nalco/Exxon and the Western Airways headquarters. The per capita income is higher than the national average.
The Best Cheap Car Insurance Quotes - Trade Secrets (18)
When you're doing your research besides checking out the car insurance companies rates, the types of coverage they provide and the deductible information, make sure to ask what discounts that they have available that you might be eligible for.
When Credit Card Balance Transfer Is For You (19)
Some say that it is better to close the old credit account, but that is not true in most cases. Not only does part of your credit history get "erased", your debt ratio will be affected negatively especially if your new card has a lower credit limit.
Choosing The Best Credit Card For The Purpose (20)
However, these plans tend to be short term in their outlook. They do not have the lasting appeal of some other plans. Some credit cards can also be used in an ATM to take out funds within the credit limit, but the interest is usually charged from the date of withdrawal, and not from the monthly billing date.
Newer Articles Highlighter:
The Benefits Of Life Insurance (1)
You can specify multiple beneficiaries if you choose to do so. For example, you might want to have your spouse as well as all of your children listed as beneficiaries.
Are Bonds Really Risk Free? (2)
The most important risk factor you need to take into account is the interest rate. Even if you are new to investing, you are probably aware that every 6-8 weeks, the Federal Reserve (also known as the Fed) meets to evaluate the current condition of the economy.
Bad Credit Increases Insurance Cost (3)
One company, as mentioned above, may not charge you nearly as much as another company will. The only way to know is to shop. Peter Kenny is a writer for The Thrifty Scot, please visit us at www.loansubmit.co.uk and www.thriftyscot.co.uk www.thriftyscot.com
What Is A Zero Percent Auto Loan? (4)
In situations like mentioned above zero percent auto loans would be ideal. In that scenario the buyer would actually save money. It is very rare that any one would actually be able to receive this offer and want to take the car that it is attached to.
How To Use A One Time Credit Card (5)
If using a one time credit card seems like a good idea to you and you wish to get one, the first place to check is with your current card company.
Best New Places To Live In Texas - The Master-Planned Community (6)
Often, several or many builders will go together to complete various parts of the communities so that different styles of housing, price ranges, and even neighborhood characteristics will be present in one community.
How To Use A Business Credit Card (7)
As well, it can greatly reduce mistakes and omissions. Another good reason to use a business credit card is that it allows the business to establish its own credit history.
Modified Internal Rate Of Return For Larger Profits (8)
The internal rate of return normally considers only the initial investment. A modified calculation adds another variable to the equation by considering the rate of return on money that is re-invested.
How To Profit From Mobile Park Homes (9)
Most of the rules that apply towards investing in houses apply to mobile homes. You don't have to live in a mobile home, you don't even need to like them, to make a profit from them.
Getting Adequate Financial Advice Is 'Vital' (10)
Commenting on the study, Tim Hague, managing director of mortgages for Birmingham Midshires, claimed that it is crucial that consumers seek out adequate financial guidance which is suitable for their needs.
How Do You Prevent Being Scammed On A Auto Loan (11)
If you happen to have bad credit or a low credit score, car dealers are just waiting to trick you into purchasing a car from them. They may claim that because of your credit score, you will have to pay a lot larger interest rate than is really necessary.
Consumers Under 'Needless' Financial Pressure (12)
Mark Dawson writes for the Loan Arrangers. Where visitors can compare loans online, and apply for the best rate UK secured loans and the cheapest debt consolidation loans available to them.
Residential Investment Property Loans - Crunching Numbers (13)
Actually, there are some key differences with investment property loans that make them a little bit trickier than you would expect. When you took out your loan for your house, it was quite a whopper.
Real Estate For Sale - Find Your Agent (14)
Sometimes there are incentives for selling company properties. If these policies are in effect, it may do two things. First, it may affect the agent fee you pay.
Millions Of Homeowners To 'Suffer' Financially (15)
In a study released by Mintel, an estimated 5.5 million, or one in three, Britons could be due to see a surge in their monthly mortgage repayments and lenders' fee should they wish to move home or remortgage their property.
Lessening The Credit Crunch For Consumers (16)
4) Reducing FHA down payment - Under new reform proposals, homeowners would no longer be required to have 3 percent equity or the cash equivalent. They could get an FHA-insured loan with 0 percent down.
Residential Investment Properties As Alternative Income (17)
Unless you are a professional do-it-yourself wiz, your best bet is to hire a management company to maintain and repair the property when problems arise. This may seem like a hassle at first, but you have to consider the results of keeping a rental home in good repair.
Your Stock Trading Rules (18)
Show them your trades, when you bought them, why you bought them, and when you plan to sell. There's a popular saying on Wall Street that goes, "Plan Your Trade and Trade Your Plan." That simply means, decide when you're going to buy and under what conditions you will sell, and then stick to your plans!
Loan Options When Buying A Car (19)
The thing to worry about with working through a dealer is that more often then not they have a much higher interest rate that they charge then going somewhere else.
Commercial Property Market Value Directs Investments (20)
Selling or managing commercial property can be a tricky business. Calculating your commercial property market values can be a difficult task. Consult KISCL for software that makes the process easier.