What is an Umbrella Policy?

What is an Umbrella Policy?Many people would benefit from purchasing an umbrella insurance policy, but not many people understand how having this type of policy can help them. Umbrella policies insure an individual, family, or business against a lawsuit that claims that there is an injured person and the policy holder is responsible for the injury. Often homeowners’ insurance policies offer some liability coverage that protects a policyholder in certain circumstances. For example, many policies offer some protection if a guest gets injured on the policy owner’s property, but in the event of a major accident, typically this coverage isn’t enough. An umbrella policy offers an extra layer of insurance.

The Insurance Information Institute writes: “An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.” Usually, it does not matter who is injured or where the accident occurs, the umbrella policy will provide funds for a lawyer, other legal expenses, and in the event a lawsuit is lost or settled, it will provide funds for the settlement. Since these policies pay out in the event that the policyholder loses the lawsuit, there is a strong motivation for the insurance company to hire an excellent lawyer and pay for other expenses such as expert witnesses. In fact, many insurance companies have in-house lawyers that focus exclusively on these types of cases.

An umbrella policy is crucial for anyone who has assets to protect and most people have more to protect than they realize they do.  If you own a house, car, or retirement plan, you should consider purchasing an umbrella policy. At AssuredPartners NL, we believe in developing insurance packages that fit your risk profile. Contact one of our knowledgeable agents at 888-702-0901 to find out more about how umbrella policies can help you.

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