Insurance policies have underlying limits that at times, may not be enough to adequately cover you and could leave you with some exposure to financial loss, because any claims that exceed the amount of a policy’s limit must be either paid for out of your pocket or be unrecovered. An umbrella policy can fill the gap that exists between your limits and your potential claims.
Umbrella policies extend the coverage limits of many types of liability insurance policies such as home, auto, watercraft, etc. A personal umbrella can provide $1 million or more in additional coverage to each of those policies you have. For example, when an auto insurance policy has a $250,000 limit and you injure another person in an accident, the medical expenses and lawsuit could cost much more than that. Having the added protection of an umbrella policy gives you another $1 million or more to put toward those costs. This keeps your savings intact while satisfying the financial obligations you have. Umbrella insurance may also provide protection for situations that would be excluded by other policies, such as if you are accused of slander or libel.
No matter how aggressive your liability insurance policy limits are, the inexpensive addition of umbrella insurance is a great, affordable way to extend your protection and meet whatever comes your way in the future.