What is Umbrella Insurance?
As far as insurance coverages go, umbrella insurance is the insurance that is meant to fill in the gaps. Like an umbrella, this insurance is meant to cover the insured from all liabilities, generally by providing coverage where other insurance policies lack it.
Who is this Insurance For?
These umbrella policies are for anyone who feels that they would benefit from a little extra protection, or for people whose existing policies just do not provide enough coverage for them to feel comfortable. The people covered by these policies are generally anyone listed on the policy, and they can include the policyholder, their spouse, and their dependents.
How does it Work?
As mentioned above, these umbrella policies work to fill in the gaps left by other insurance policies. On the administrative side, the insured must pay monthly or semi-annual premiums to the insurance company in exchange for this coverage. Once an event happens that triggers the use of the other insurance policy, this insurance will then look to see if anything is not covered once all of the expenses are settled. Depending on the policy, a lump sum of cash may be paid after the costs are incurred, or the insured may be able to have the expenses taken care of as they are incurred by the insurance company paying the services directly.
What is all Covered?
Umbrella policies are meant to cover the insured from excess liabilities, and they are usually tied to home and auto policies. Therefore, any liabilities that are experienced that are not covered by these other policies should be covered under the umbrella policy. Of course, all policies have different thresholds and limits as to what they cover, so due diligence must be made on the part of the insured.
So, What is the Real Benefit?
The underlying benefit of this insurance is that extra liabilities that would not be covered otherwise are now covered by the umbrella policy. This insurance acts in a way to further protect the insured’s life and well-being now and in the future.