Umbrella Insurance

Umbrella Insurance Policies

Chicago Insurance Advisors

 

What is Umbrella Insurance Coverage?

Umbrella insurance provides extra liability coverage beyond the limits of your homeowners or auto insurance liability coverage. It is designed to protect the policyholder from major claims made that can exceed existing policy limits. When policy limits are used up, umbrella coverage is activated. The umbrella aspect of coverage will have its own set limit, normally a minimum of $1 million.

Umbrella insurance can also function as primary insurance for the kind of risks that are not normally covered by the usual liability coverage. (Examples include slander and libel.) This additional coverage helps individuals who have more substantial assets and is for those who may also be at a higher risk of getting sued. If a big judgment is awarded against you, you could lose your home, auto, investments and even have future income be in jeopardy with such a judgment. Umbrella even protects you if no lawsuit is filed and, in comparison to other kinds of insurance, the cost of good umbrella coverage is notably less. Certain aspects taken into consideration, such as age, driving record, credit score and claims history can also be big determining factors for umbrella premiums.

Umbrella coverage is usually only offered to those who buy the insurer's maximum auto and homeowners insurance coverage limits. That's a limit normally of $300,000 per person. Should one be exposed to liability due to a serious car accident and the damages exceed a normal $300,000/$500,000 policy limit, then this is where umbrella coverage helps.

Looking at it from the point of view of its advantages, the cost of umbrella coverage seems quite reasonable considering all the extra added protection, especially at sometimes less than a dollar a day.


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