When you're involved in a car accident, your primary auto insurance policy may not cover all the costs, especially if the damages or injuries are severe. This is where umbrella insurance offers an extra layer of financial protection. Let's explore an umbrella policy, how it works, and why it's a crucial addition to your auto insurance coverage.
An umbrella insurance policy is designed to provide extra liability protection on top of your existing policies, such as auto, homeowners, or renters insurance. This type of policy kicks in when the liability limits of your primary insurance policies are exceeded, ensuring that you're not personally liable for damages beyond those limits.
Umbrella insurance works as a secondary layer of liability protection. Let's say you're at fault in a serious car accident where the other party's medical bills and damages total $500,000, but your auto insurance policy only covers $300,000. In this scenario, you would be responsible for the remaining $200,000, which could come from your savings or property if you don't have additional coverage. However, if you have an umbrella policy, it would cover the $200,000 excess, saving you from personal financial loss. Umbrella policies typically provide coverage starting at $1 million and can go higher, offering relief that you're fully protected in high-liability situations.
In addition to auto accidents, umbrella policies provide broader coverage across different areas of liability. Common scenarios where an umbrella policy can provide additional protection include:
Umbrella insurance is generally affordable, especially considering the extra protection it offers. A typical policy with $1 million in coverage can cost around $150 to $300 per year, increasing the cost as you add more coverage. The affordability makes it a wise investment for individuals with significant assets or those who may face greater liability risks, such as homeowners or drivers with multiple vehicles.
If you have assets that could be at risk in the event of a lawsuit, an umbrella policy is a crucial addition to your insurance portfolio. Accidents happen even if your lifestyle seems low-risk, and the legal and financial consequences can be devastating. Many ask, "does an umbrella policy cover auto accidents?" It covers any liability that exceeds the limits of your auto insurance policy, making it an excellent tool for protecting your financial future in the event of a costly car accident. Additionally, umbrella insurance protects other aspects of life, ensuring that you and your family are covered in various liability situations.
At CF&P Insurance Brokers, we understand the importance of protecting your assets against unforeseen liability claims. Whether you're looking to bolster your auto insurance with an umbrella policy or want comprehensive liability coverage, we're here to help. Contact us today to learn how umbrella insurance can provide you with the extra protection you need in today's unpredictable world. Call us at (925) 956-7700 to get started.
