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Why You Need an Umbrella Policy: Protecting Your Assets and Future
Posted by Risk Management Partners Insurance Agency on
Insurance policies are a way of protecting your future and assets from any financial losses due to unforeseen events. It’s a safety net that can provide financial security during tough times. One type of policy that you may not be familiar with, but is important to have, is an umbrella policy.
An umbrella policy is a type of liability insurance that goes beyond the limits of your other policies, such as your auto or homeowners insurance. It provides additional coverage for bodily injury, property damage, and other types of liability claims. Essentially, an umbrella policy provides an extra layer of protection when your other insurance policies are exhausted.
Why is an umbrella policy important? Let’s take a closer look at five reasons why you need one.
Protect Your Assets
The first reason to consider an umbrella policy is to protect your assets. If you’re found liable for damages or injuries and your insurance policies don’t cover the full amount, you may be required to pay the difference out of your own pocket. This can quickly add up and potentially put your assets, such as your home, savings, or investments, at risk. An umbrella policy can help protect your assets by providing additional coverage beyond what your other policies offer.
Cover Costs Beyond Policy Limits
An umbrella policy also helps cover costs that exceed the limits of your other insurance policies. For example, let’s say you’re involved in a car accident and found liable for damages that exceed your auto insurance policy’s limits. If you have $250,000 on your auto policy for a $750,000 loss, your auto policy will only cover that $250,000 and the extra $500,000 would have to come out of your own pocket if you don’t have an umbrella policy. An umbrella policy can help cover these additional costs and provide peace of mind knowing you won’t be financially responsible for expenses that exceed your other policy limits.
Protect Your Future Earnings
In addition to protecting your assets, an umbrella policy can also protect your future earnings. If you’re sued for damages or injuries, and the court awards a judgment against you that exceeds your insurance policy limits, you may be required to pay the difference out of your own pocket. This can be especially devastating if the amount awarded is large and your future earnings are put at risk. An umbrella policy can provide additional protection for your future earnings by covering costs beyond your other policy limits.
Cover Liability Claims Against You
An umbrella policy can also provide coverage for liability claims against you that are not covered by your other insurance policies. For example, if you’re sued for libel or slander, your homeowners or auto insurance policies won’t cover the costs. An umbrella policy can provide coverage for these types of claims and protect you from financial loss.
One of the most significant benefits of an umbrella policy is that it provides an additional layer of protection at an affordable cost. Umbrella policies are relatively inexpensive compared to other types of insurance policies and can provide peace of mind knowing you’re protected in case of a liability claim. For an extra million dollars in coverage, costs can be as low as $200 per year.
In conclusion, an umbrella policy is an essential part of your overall insurance portfolio. It provides an additional layer of protection beyond your other insurance policies and helps protect your assets, future earnings, and provide coverage for liability claims that may not be covered by your other policies in Arvada, Wheat Ridge, or Golden, Colorado. Additionally, it’s an affordable way to provide peace of mind knowing you’re protected in case of a liability claim. Talk to your insurance agent to learn more about umbrella policies and how they can benefit you.