A standard homeowners insurance policy covers many risks, but not everything. The reason many people add an umbrella insurance policy to their standard policy is to pay for emergencies that exceed expectations. It's a way to expand your safety net. Here's a look at what umbrella coverage can do for you.
Getting an umbrella insurance policy will pay for liabilities that exceed your standard policy's coverage limits. So if someone trips and falls on your property and medical bills cost more than what your standard policy covers, your umbrella insurance will kick in to pay the rest up to extended coverage limits.
Two types of insurance coverage useful for extending your vehicle coverage are uninsured motorist (UM) and underinsured motorist (UIM) coverage. These coverage extensions pay for accidents when you are struck by a driver who lacks any or sufficient auto coverage. While most states mandate a certain auto insurance coverage level for liability requirements, not all drivers comply with the law.
Both UM and UIM coverage is designed with more than just wealthy drivers in mind. This insurance can be useful for anyone when you consider that anyone can get in a car accident if someone else is driving recklessly on the road. It's fairly inexpensive and goes a long way if you become involved with an at-fault driver who is uninsured or underinsured.
Not only do UM and UIM policies extend the coverage of both your home and auto policies, but they also pay for legal costs if a case goes to court. It can also protect you from liabilities such as false arrest, slander, invasion of privacy, and wrongful eviction.
Like all insurance policies, an umbrella policy only covers so much. Issues that an umbrella plan does not cover include illegal activities, damage resulting from military combat action, or intentional damage. Nor will it provide coverage for a home business.
The key for all umbrella insurance buyers is to get as much coverage as possible to cover all assets. So if your homeowners policy has a coverage limit of up to $1 million, but you own $2 million in assets, you should consider getting umbrella coverage up to $2 million.
People who need UM and UIM coverage as part of an umbrella policy include parents whose kids are learning to drive. Since teens are a group responsible for many accidents, it's wise to get extra coverage.
Another reason to get UM and UIM coverage is if your state has a high percentage of accidents caused by uninsured or underinsured drivers. Additionally, if you own an expensive car, you may want the extended coverage to be on the safe side.
No one expects to be hit by another car while driving, but it's usually the other driver you need to watch out for. That's why umbrella coverage is important for all drivers to consider. Contact our experienced team at CF&P Insurance for more information on starting an umbrella insurance policy.
