Many people are unsure what umbrella policies are and whether or not they are beneficial to themselves and their businesses. We’re here to help. We will explain the basics of umbrella policies and how they can help you.
Umbrella policies supply extra coverage in the event of a lawsuit. Just as umbrellas shield you from rain, umbrella policies protect you from losing the entirety of your wealth and assets. These policies supplement your personal policies by covering beyond the limits of liability associated with those policies. Also, you chose how much more it covers; typically starting around $1 million.
Insurance agents need you to have advanced limits of liability on the entirety of your personal policies before they offer the option of an umbrella policy. Typically, the limits of liability needed are $250,000 for bodily injury protection per person and $500,000 per accident. This may vary, so check with an insurance agent in Dallas to find what the specific requirements are.
Let’s look at an example of an umbrella policy in action. John Doe swerves to avoid an obstacle on a busy highway and causes an accident. Though everyone survives, many are severely hurt and the sum of the medical bills climbs to $800,000. John Doe’s insurance only covers $500,000, but has an umbrella policy. The umbrella policy comes into play and covers the remaining $300,000.
Umbrella policies are not for everyone. It is uncommon for the average person to have one in place and it may not be worth it for them to carry a policy such as this. Umbrella policies are mainly recommended to people or businesses in possession of considerable assets.
Is an umbrella policy right for you or your business? Did we leave you with even more questions about umbrella policies? Talk to your Insurance Connection USA agent today and you can learn even more about umbrella policies and how they could benefit you.