Umbrella Insurance Policies Are Not Just for the Rich

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Many people traditionally believe that umbrella insurance policies are just for the wealthy. While this may have been true at one point, it’s no longer the case.
The truth is that most people stand to benefit from topping up their basic home and car insurance with an umbrella policy. So, what is an umbrella policy and what could it mean for you? Jerry has all the details.

What is an umbrella insurance policy?

A red toy car is sheltered by a red umbrella being held above it
Umbrella insurance protects you from damages beyond your liability insurance.
The simplest explanation is that an umbrella insurance policy gives you more liability coverage than you’d get from a traditional car insurance policy.
Most umbrella policies are designed to provide additional coverage for:
  • Injuries sustained during an accident
  • Personal liability problems that may arise during a claim
  • Property damage
  • Civil lawsuit protection
The umbrella policy kicks in and picks up the slack if and when your standard policy isn’t quite enough.

How you can benefit from an umbrella insurance policy

The biggest advantage connected to purchasing an umbrella insurance policy is knowing that you have additional liability insurance that will kick in if you’re ever named the defendant in a civil lawsuit.
Lawsuits following car accidents are incredibly common. In fact, according to Consumer Notice, approximately 60% of tort trials (which involve personal, physical, and financial damage) in state courts during the year 2005 were related to car accidents.
Crain’s Cleveland Business explains that medical and litigation expenses in excess of your traditional auto insurance policy wouldn’t be covered.
Without an umbrella policy, you could be held responsible for large sums that could put you in financial ruin.
It is important to note that, according to Investopedia, umbrella insurance policy won’t kick in to cover your injuries or property damage, but it does have your back (and your family’s) in the event that someone else’s property was damaged or they were injured in an accident that was ultimately your or another family member’s fault.

Should you invest in an umbrella insurance policy?

Crain’s Cleveland Business dispelled the idea that umbrella insurance policies should only be of interest to the very rich. Everyone should be able to protect their assets and themselves to the fullest extent, regardless of their net worth.
Investopedia offers a good rule of thumb on the matter: if the cumulative value of your assets exceeds your car or homeowner’s liability insurance, then you should probably look into getting umbrella insurance.
They do admit that it’s tough to make generalizations about this, as you should really evaluate whether you are at risk of being sued. Some people’s lifestyles might make them more vulnerable, but ultimately, we are all at risk in one way or another.
It can be important to think about whether you and your family rent out your property, host big parties, or have a young driver in the house. Umbrella insurance can protect you in these higher-risk situations.
Car insurance isn’t something you can afford to be without. You deserve an insurance policy that provides you with plenty of coverage and that doesn’t cost an arm and a leg. The next time you find yourself shopping for car insurance, save time and use Jerry’s app which quickly gathers and compares affordable auto insurance quotes that are perfectly suited to both your budget and coverage needs.

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