Lawsuits are more common than even before. You can get sued for all kinds of reasons. This is why some people worry they might not have sufficient liability insurance. Umbrella policies exist for this very reason.
What is an Umbrella Policy & Who Does it Cover
Umbrella policies provide additional liability beyond that provided by your homeowner’s, auto, business or motorcycle policy. In short, an umbrella policy provides extra coverage. It helps pay expenses commonly associated with lawsuits.
Umbrella insurance requires that you already have a regular policy that includes liability coverage. That’s because umbrella policies cover expenses remaining after a traditional policy has reached its limits. Imagine that you have $200,000 liability coverage on your auto policy plus an umbrella policy for $300,000. If you’re sued for $500,000, the first $200,000 will come from your regular policy and the additional $300,000 will come from the umbrella policy. But without an umbrella policy, you’ll be responsible for the entire $300,000.
No one expects a lawsuit, but they do happen. At least with umbrella insurance, you’re guaranteed financial assistance up to policy limits. Speak with an insurer to learn more about this type of policy. They can help you determine if you should invest in a policy.