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The Basics of Umbrella Insurance

December weather brings fronts and gloomy days, and most people carry an umbrella to help protect them from the cold, wet rain and other weather elements. Much like its helpful namesake, umbrella insurance protects its policyholders from several types of incidents by covering claim costs that exceed your insurance policy payouts. According to Forbes, an estimated 40 million lawsuits are filed each year, averaging $40,523 in settlement costs. So why not rely solely on your insurance policies to cover these settlement costs you’d potentially run into if you were sued? Your insurance might only pay out so much, leaving your other assets, such as your house or car, at stake for repayment. Umbrella policies swoop right in and save you from the stress of losing your valuable possessions. What exactly does umbrella insurance cover in a claim? Umbrella insurance can cover extra costs when your homeowners or car insurance may not be able to cover (due to being exhausted). These costs include defense costs, attorney fees, or extensive medical bills from suits against injuries, property damage, and certain personal liability situations. Specific umbrella insurance policies can even cover the trickier situations that your basic policy won’t cover, including slander and libel cases, as an example.  Is umbrella insurance excessive, or is it right for me? It depends on how much stress you want to carry and what you feel works for your budget. It provides additional coverage in certain situations, saving you from worrying about legal problems affecting your family and your most valuable assets. It prevents you from paying out-of-pocket for legal or medical bills your standard policy didn’t cover, saving you thousands of dollars in payments straight from your bank account. Some policies can even extend to protect members of your family. But, again, it’s essential to talk with your agent about exactly what your umbrella insurance covers so you don’t feel blindsided or unprotected. So, what’s my next step? Deciding whether or not umbrella insurance is right for you will mean sitting down and evaluating the risks you take against the valuables you own. Consider umbrella insurance if you are in a personal or business situation that opens you up to more potential legal problems. For example, this type of insurance makes sense for someone who frequently entertains at their home, as you never know when someone could get injured and sue you for medical expenses. In short, umbrella insurance makes sense for anyone wishing to have added protection against losing their valuable possessions. If you have any questions about whether or not umbrella insurance makes sense for you, don’t hesitate to reach out to an agent at or by visiting our website.  

 In case you missed it: Check out “Bundling Isn’t Just for Cold Weather” to start bundling your insurance policies and start saving money.