3 Reasons Why Your Need an Umbrella Policy

Do you have a $1 million umbrella policy? You are not sure what this policy is and why you need it?

If you own a couple houses, and rent some houses out or have a dog, a boat, or a Jet Ski, motorcycle or RV, you should have it. The more property you own, the more risk you are taking. Any parent or guardian of a teenage driver in the household should consider this coverage as a necessity. If you are a movie star, a politician or other public figure, your additional liability policy should be purchased with an insurance company that specializes in those kinds of policies.

An umbrella policy provides additional liability insurance over and above the basic coverage provided by underlying liability insurance, such as an auto policy. You also can purchase a standalone excess liability policy that does not require an underlying policy. Such a policy also covers some losses that are excluded by the auto or homeowner's liability insurance.

Here are three major reasons why you need an umbrella policy:

These days, anyone can be sued for almost anything. If you caused a five-car accident on the road because you were texting, you can be sued. If you had a party in your home and somebody tripped on that staircase that you had no time to fix, you can be sued. Liability policy provides coverage against lawsuits that you, your spouse, partner or kids, or even a pet caused bodily injury or property damage to other person by accident. False claims, false arrests, slander, libel, vandalism are also covered. In case of a lawsuit, if you are guilty, the court can order your personal savings and personal property to be taken away from you to pay for the losses. Even your future earnings can be subject to paying for that loss. I am sure you don't want that to happen. An umbrella policy covers the insured and his or her family anywhere in the world.

Personal umbrella policy range can be from $1 million to $5 million, but the premiums are not that high. The majority of a loss is paid by your primary auto insurance, so your umbrella insurance rates are not that expensive. This type of policy can cost between $110 to $300 per year, depending on how much property it covers, the state and country where the policy was purchased. Contact your agent and purchase an umbrella policy and be safe!

When Is Umbrella Insurance Necessary?

To begin understanding when is umbrella insurance necessary, you will want to examine how umbrella policies work and their benefits. There are some common misconceptions about this type of insurance to look at when determining the types of insurance that you need, as well. Umbrella insurance is highly affordable and provides ample coverage when other types of insurance fall short.

The Basics

Insurance, such as liability, usually only covers a specific amount of damages. For example, if you have an accident policy that only covers $10,000, anything left over after insurance pays the injured party can be covered by other insurances or out of pocket. Having additional insurance policies is ideal regardless of your income, contrary to popular belief that only the wealthy need to have several types of coverage.

In fact, most people can benefit from having umbrella insurance throughout their lives. This type of insurance kicks in to cover several different types of issues, including slander and libel lawsuits, property damage and can even help pay your legal fees. You will find that expanding your coverage is also inexpensive, and only takes a few moments of your time to get.

The Costs and Benefits

Umbrella insurance can vary in cost from one hundred to about three hundred dollars annually, depending on the amount of coverage that you need. Most policies will cover up to one million dollars in legal fees and damage, ensuring you are fully protected in most cases. You will definitely want to have more insurance than assets to maintain your property and other personal assets in the case of a lawsuit. An insurance specialist can assist you in choosing the right coverage amount of you aren't sure what you need.

Quite often, umbrella insurance is best when started as soon as you obtain liability insurance for driving, or when you obtain personal property. Some people, such as those working in the media, can also benefit from umbrella coverage since the policy will cover damage caused by stating untruths, whether in online, print or spoken media. Working with an insurance expert can be the best way to determine when you need umbrella insurance, as well as figuring out how much you need.

Getting Started

When choosing umbrella insurance, you will want to be sure that you have the right policy at the right time. Most people can benefit from the addition of an umbrella policy added to their other insurance, especially when driving or after purchasing personal property.

The Facts and Truth About Umbrella Insurance

Do you volunteer on a non-profit board? Do a lot of community service?

Own some nice toys - boats, motorcycles, ATV, RV, snowmobile, camper or Skidoo?

You might be at higher risk than the "average" consumer and need extra liability protection called an Umbrella Policy.

Umbrella Insurance is probably the least understood insurance coverage there is and the most mistaken what it is too. Consumer's believe that everything they own is covered under 1 umbrella policy, like it is a "one policy fits all" blanket coverage.

Actually, an umbrella insurance policy goes over everything you own, not replacing your underlying insurance policies (like most people think). It is NOT blanket protection including all you own but blanket protection OVER everything you own.

Umbrella insurance policies protect you and your family with an additional $1,000,000 of liability protection, over and above what you have on the underneath policies. You still need the underlying policies in place before any umbrella protection will kick in.

Today's consumer is being more and more susceptible to lawsuits from others who make a claim against you. The more you have to lose, the more you need umbrella insurance protection. With some plans starting at $10 a month, it is pretty inexpensive coverage to add with those who have a lot to protect.

The best way to buy an extra $1,000,000 of protection is with your current auto and home insurance company, as they will have a bundled rate, discounted because of the other 2 policies. But there are also insurance companies out there that have "stand alone" policies, that will go over your existing auto and home insurance.

Let's say you have an at-fault auto accident, where you injure the 2 parties in the other car. They see an attorney advertising on TV and decide to press you with a lawsuit for their pain and suffering (actually 2 lawsuits). Your auto policy will cover the initial $250,000 per person and $500,000 per accident coverage for the lawsuit (your need $250,000/$500,000 to qualify for an umbrella insurance policy).

Once those limits have been satisfied, then you $1,000,000 (or more) umbrella insurance limit would kick in and provide the additional liability coverage for your lawsuit. This coverage protects you and your family in the event you are found guilty of any amount over the $250,000 per person.

Be a smart insurance consumer, get proper insurance protection.

Loan Protection Insurance - An Umbrella Cover in Times of Calamity

Loan protection Insurance may be provided along with your loan. If you apply for a secured loan you may have often come across an insurance plan which provides you security against missing out on your payments. Keep your house or any other asset pledged against your loan intact by being consistent with your payments. How do you ensure that your mortgage payments are made out on time?

Simple, get an insurance cover which will ensure that your mortgage payments are made despite of you being out of employment. You may be bed ridden for long and are unable to meet your financial expenses. Don't worry, your policy will take care of your expenses too. Ensure that you have opted for a right policy when you apply for your mortgage.

Usually, you are given out a monthly compensation of 65- 70%. When an unforeseen event occurs in your life, you can make use of these policies and claim for a compensation. Avert any kind of financial calamity and be secured. Despite of all financial odds, you should be in a position to lead a normal life covering up all your expenses. Isn't it peaceful, to have paid out your mortgage payments on time and continue to enjoy your three square meal with your family despite of being out of employment.

Avoid late fees or any penalty associated with non payment of your mortgage. You may risk your asset pledged against your mortgage. In order to have a secured future, understand the terms and conditions of these protective policies.

Get Yourself Protected Against Uncertainty - Get Umbrella Insurance

An Umbrella provides protection against rain or sun light. The term Umbrella Insurance has the same concept and thus it is self explanatory. Umbrella Insurance is a policy, which is a bit different from other regular insurance policies. A person pays some extra amount of money to get this insurance product to protect him against uncertain event, which may arise without any prior notification. An uncertain event is usually taken as something, which gives an eventual stress and pressure on the mind of the person going through the situation. The importance of protection from these uncertain events is well known by a person, who has been into it previously but for those who have their luck protecting them up till today, they must not wait a day more and should get an Umbrella over their heads to protect them.

Umbrella Insurance works in a peculiar way. When a regular liability policy refuses to give the coverage against a claim, Umbrella makes the entry and covers the exceeding amount. For instance, if a person has been facing a lawsuit and his liability policy's limit is already exhausted, he could use his umbrella to protect him further.

Umbrella Insurance Policy covers all other policies, which comes under its shadow such as auto insurance and homeowner's insurance. It also provides coverage for claims those may be excluded by other regular liability policies.

A person is always unaware, when he is going to be hit by a car from behind, a flood, an earthquake etc. A person can face lawsuits for a bad thing happened with and than he is required to pay regular visits to the court for hearing. Going ahead, he is left crying with empty pockets and a long way yet to go for those hearings. So, it is far better to play safe before the safety option goes far away.

As the awareness has already been created regarding insurance policies and the benefits those policies provide to an individual or businesses; there is still some awareness required to make the benefits of umbrella insurance prominent. This policy is not only for a person with great wealth but for everyone, who can afford it, when putting it on the first priority. It is a must and cannot be ignored. After all, if a product can provide peace of mind then no price is big enough. If you think, you need that extra bit of cover, then go and buy it.

Universal Life Insurance Planning For Your Future

Life can be an amazing experience at times. There are some instances where everything may be just fine and then our life can be on death's door. It is important that everyone has some type of life insurance to protect their family members and loved ones in the event of a sudden or unexpected death. There are a number of life insurance options to choose from including Term Life, Whole Life and Universal Life insurance.

Universal Life insurance is a particular type of life insurance under which an individual is covered for their entire life. Any premium payments that are made by the insured party above and beyond the requirement are added to the cash balance. Typically, an insured party will make an insurance premium payment. The amount will then be credited to their Universal Life insurance policy. However, there will be fees that are deducted from the policy. Administration fees and other fees that are written within the policy will be deducted from the balance each month.

These fees are typically a very small amount and are meant to pay the staff, which runs the policy as well as for claims and customer support.

One of the numerous advantages to owning a Universal Life insurance policy is that it can be used to pay off debt. All Universal Life policies have a cash surrender value. This is the value of the policy if it were to be terminated and a cash benefit paid out to the beneficiary at the present time. Some individuals purchase a Universal Life policy with the idea of saving money. While it is not meant to be a savings account, a Universal Life policy could be used to store money should an individual need to access it at a later date. There are three main types of Universal Life policies: single, fixed and flexible.

Single premium polices used to be more common. They typically involved placing a single large premium into the policy. This was very similar to placing a large amount of money into a bank that was not taxed or subject to any scrutiny. Federal legislators changed the law to ensure that this type of policy was not abused by the wealthy.

Fixed premium policies are where the same amount is paid each and every premium payment until the death benefit is reached. There may be some premium payment periods that are short, while some may be for the length of the policy. It is written differently in each and every policy. These policies are considered to be higher risk due to the fact that they require a certain amount of interest to accrue from the paid premiums. During periods of high interest, there may be problems with the policy. An individual may have to pay more in order to still have the same amount of death benefit.

Flexible premium policies are useful for individuals who want to keep their options open. Payments can be varied in time and amount based upon the policy requirements and the owners choice. There is typically a choice for the level of a death benefit in dollars and an amount of risk, which an individual is willing to take. These types of policies are useful for younger individuals as well as those who follow their insurance accounts closely.

Income Protection - A Reliable Way To Protect Your Finance

For working people, situation may be there in life when they get sick and have to stay back at home, and getting their disease treated. Most of the people absent from their work suffer from lacking finance. It doesn't only cause the entire dependent family to suffer, but also they lack money to get their ill health treated. In this way, availing an income protection insurance helps very positively to get all the financial stress over. This insurance lets them enjoy a reliable method of financial protection. Also known as PHI or Permanent Health Insurance, this insurance pays a compensation to the insurer unable to work and go to his/her office.

For people who are unable to go to their office due to some sort of sickness, accident or any other inability, income protection appears to be a boon. Under this insurance policy, the provision is to pay you at least 60% of the salary you are drawing currently. Though in some cases, the amount may escalate up to 75% of your salary. The waiting period for which you will have to wait range between 7 days and 12 months. Usually, the minimum period of getting the benefits paid goes up to 4 weeks. Longer waiting period is useful for those who are able to go to office. But too much waiting period can be of huge disadvantage for those in need of urgent medical as well as financial assistance.

To save oneself from such difficulties, the dire need is to buy the insurance policy only from a company which are reputed for their services. Buying income protection insurance needs a lot of consideration, as even little wrong information could let you fall into severe financial problems. Before you end up signing an agreement, decide how much your income you want to protect. And when you are choosing an insurance company, the best way to select one is to do some online research, and compare the features and price of different insurance policies.

Personal Liability and Covering Your Assets

Umbrella insurance is a wonderful thing to consider in the world we live in. It will provide you with more money for your accidents that may happen in life. This can help cover your legal expenses if they were to go over your home or car insurance policy limits. Some insurance companies will offer up to $500,000 in regular coverage, and then offer an umbrella policy up to $1.5 million. This can be a great way to protect your assets if you deem necessary.

You should talk this over with your agent and see what options are available for you. They can also advise you based on your individual situation as well. Different people will require different types of insurance. Ask different questions to find different answers. I have known some people that have found it to be cheaper to get a $250,000 policy for themselves with a 2 million dollar umbrella policy than it was to just get a $500,000 policy. This doesn't make much sense to you and me, but insurance companies have their reasons for what they do. Just ask the questions and you might be surprised what you are able to find out. You can still enjoy a lot of insurance to help you sleep at night, while getting it for a very reasonable price.

I personally recommend going with big name insurance companies. I have some policies with smaller companies, but they are usually for rental property and such. Just call around and see what is available to you in your area.

Some umbrella policies are cheaper in other parts of the country. It all depends on where you live. I have known people to get a $250,000 policy in one area and another to get a $250,000 policy with a $1 million umbrella policy for the same price. It just depends on where you are. Insurance companies factor in many things to determine how much to charge, feel free to ask you agent what they factor in.

Do I Need Payment Protection Insurance?

Payment Protection Insurance (PPI) is a loan that is provided to cover a debt that is presently outstanding. It is an insurance product in the form of loan or an overdraft, and is commonly sold by banks, insurance companies and other credit providers as an add-on to the loan or overdraft. The credit providers offer this loan to you if you are unable to pay some debt on time due to financial crises.

Payment Protection Insurance is at times also known as Credit Protection Insurance or Loan Repayment. The suppliers of this insurance can vary slightly however, Payment Protection Insurance covers a person against an accident, unemployment, illness or death. All these are circumstances that may be a reason for preventing a person from earning a salary by which they can pay their debt.

This insurance usually covers a minimum repayment against the loan or overdraft for a particular period, if all the appropriate criteria are met. Normally this time lasts for about 1 year or so. After this time, the person must find some other sources to repay the debt. Normally people are able to find or start their work again by this time so they can repay the debt themselves.

Payment Protection Insurance though helps to repay your debt at the time of crises but obtaining it is not an easy job. You can assess if you need payment Protection Insurance by pondering over a few things. You should decide whether insuring your loans is a necessity for your lifestyle.

For example if you are old or very likely of getting an illness; if you have a large family to support or if your financial conditions are quite stressed, then you have a need for payment protection Insurance. If you are self-employed, then there is no point in taking PPI. Even if you are working part time or are suffering from any sickness, then you should not go for Payment Protection Insurance since it is likely that you would not be able to repay your debts even after the period for PPI is over.

If you have any illness like cancer and you are hoping to get PPI, then it is needless. Lenders are aware of the fact that these diseases can be diagnosed and treated much quicker than in the past and they are reluctant to offer the loan. So the diagnose would not definitely end up in getting you this loan.

Before deciding whether you need a Payment Protection Insurance, you must check on your company's policy regarding long-term sickness. Many firms and companies pay you salaries in case of serious sickness. Furthermore, some of the larger companies have schemes under which they pay you your salaries for as long as 6 months.

In such a case, you would not need Payment Protection Insurance to repay your debts. Moreover, if your spouse or partner is earning well and can support you while you are sick, then again you do not need a PPI. Although PPI is very useful when you are in crises, before taking it, you should rationally decide if you need it or not. Not only is it difficult to get it, PPI Claim also does not come cheap.

Thank Goodness I Have an Umbrella! So What Is It?

What is an Umbrella? We immediately envision a water proof canopy to hold over ourselves during a rainstorm. I like to picture those nice size ones that not only protect your head and shoulders, but maybe your clothes, briefcase, etc. We all have that kind of umbrella. Most of us just don't all know where it is at this moment. You organized folks out there know where your umbrella is. You probably have one in your vehicle, your home and where you work. The rest of us have 2 or 3 also. They have just all ended up in the same place....or broken. We really don't think about our umbrellas, until it rains.

A liability umbrella is the same concept. It provides additional liability protection for all your insured property that is listed under the umbrella. Is this important? It depends. Do you have a job, savings, assets, money buried in the yard? Then yes. Do you feel that it would be important to make sure to provide financial assistance if you cause an accident where others have been injured or disabled? Then yes.

The easiest way to understand how an umbrella works in most situations is to give you an example. Example: You are driving your vehicle and a ten year old on a bike comes between two parked vehicles. The sun is in your eyes and you see him too late. You have no time to react. The child is paralyzed for life from the waist down. Your insurance policy on the vehicle you are driving has a per person limit. Let's say for the example your limit is $250,000 per person. The hospital bill alone exceeds that limit. Your insurance would pay $250,000 to the guardian of the ten year old. The insurance company would not provide any additional legal support once the limit is offered. The ten year old parent obtains a lawyer to recover damages from you for additional medical bills and additional expenses needed for the care of the child now and in the long term future. You get an attorney to help represent you to negotiate a settlement. You are responsible for the attorney fees and whatever settlement is awarded. How do you pay this? Equity in your home, assets, other property, wages? What if you can't?

A lien would be placed on you...possibly for life. If you have an umbrella, the auto policy would be used first. Once that amount is used, then the umbrella limit would be available for additional damages. Your insurance company would still provide legal assistance. As long as the umbrella limit is not surpassed, you have no worries regarding your assets or future income. The second part of this is the moral issue of feeling responsible in this situation. This situation is truly an accident but legally we may still be responsible and morally, most of us would feel awful about injuring anyone. Especially a child. Having the additional coverage an Umbrella provides makes us feel better that we can at least provide some financial assistance to the child and his family to help with the additional expenses they have.

Most Umbrellas begin with a $1,000,000 limit. Depending on your financial picture, higher limits are available with most carriers. Talk to your agent about specific additional coverages the policy provides and get a quote. Make an informed decision on cost versus benefit for you.

Facts Everyone Should Know About Umbrella Insurance

Umbrella Insurance - sounds familiar, doesn't it? Many of us may have heard of this at one point or the other though most of us may know not much or anything about it. As the name itself indicates, the umbrella insurance protects an individual in times of legal troubles similar to an umbrella which protects one during a downpour. Well, it is a very beneficial insurance policy covering many areas which the home insurance or the auto insurance policies do not. Another noteworthy feature of Umbrella Insurance is that it is advantageous over so many other insurance policies as even after the exhaustion of an individual's regular policy it fills in the gaps in coverage.

It is a common knowledge that at no point of time any of us can foresee what might happen in the near or far future. There are so many instances wherein you or I have to face a lawsuit filed against us. For instance, you happen to injure someone with your car. He sues you for it and the legal expenses and the judgment costs levied on you exceed your auto insurance. Then, umbrella insurance comes to your rescue.

If you purchase the policy you can face such unforeseen situations without having to lose any of your personal assets. Though many people mistake it as an extra liability, it is not. Umbrella insurance comes to one's rescue in case if he is sued for a thing not covered by his home insurance or auto insurance.

The individual can select the amount of coverage after carefully calculating the worth of the assets he owns. For instance, if you have personal assets worth, say, a million dollars you have to go for a million dollar umbrella. Similar to an umbrella, it is also cheap. With just as little an amount as $120 dollars one can purchase as high as one million dollars of excess liability. Considering these two points, many individuals go for buying an umbrella policy the cost of which is far more than the actual worth of their personal assets. The excess liability provides protection for many things such as imprisonment, defamation, invasion of privacy and many more that have nothing to do with the car or home you own.

One important point worth considering is that an individual needs to maintain a certain amount of liability on his home and auto policies before seeking to purchase the umbrella policy.

ULIP & ELSS - Appetite Factor Rating

Do you have an appetite for adventure when it comes to investments, do you love taking risks? If yes! Then here is a news flash for you: Let's start with the good news - the higher the risk the higher the return! Now for the bad news - higher risk can also mean no return or negative return!

What a damper! Certainly spoils an honest-to-goodness hard-working family-man's appetite for high risk investments. When starting life as a responsible adult (usually happens once you get married and have kids to support), the first responsible thing to do is financial planning. And the first lesson you learn (as a layman in financial matters) under this subject is how to make your money grow, the second lesson tells you all about the instruments of investment that can be used to grow the money - and last but not the least, one learns about how to decide on the right investment instrument with the aid of the wealth pyramid. In this article we will analyze the ULIPs and ELSSs based on the wealth pyramid theory, in order to rate the 'appetite for risk' required for investing in either of these schemes.

The Wealth Pyramid

A wealth pyramid goes a long way in helping you to keep your appetite for risk in check. A time-tested concept in the investment arena; the wealth pyramid positions common investment instruments according to the returns they offer. The pyramid base always indicates the most stable investments that translate to lower returns, whereas, the pinnacle of the pyramid denotes the highest risk investments that may either deliver the highest returns or no returns.

So when in doubt, use the pyramid model to discern between a stable verses risky, investment instrument.

ULIP Pyramid Score

ULIP stands for unit-linked insurance plans, these offer investment units, e.g. mutual funds etc. plus life insurance coverage to the investors. Under this plan you have to pay a fixed amount every year (monthly, quarterly, half-yearly or annually) for at least the first three years of the policy. Part of the premium you pay will go towards administration charges; the rest will be invested in assets like equities/ debt, etc. as per your choice.

ULIP also allows the investor to move money from high-risk equities to debts or vice versa, anytime during the policy's continuation. Moreover some insurance companies also offer ULIPs with a capital guarantee that shields the investor's premium in case of a market slide. And let's not forget the tax benefits under Section 80C; just another plus for the ULIP. As a result of all these stability / safety factors, ULIP returns are on the lower side. This places ULIP firmly at the middle of the Wealth Pyramid.

ELSS Pyramid Score

ELSS stands for equity-linked savings schemes; these offer a diversified equity mutual fund scheme. Under this plan you have to make the investment at one-go and it is locked in for three years. You also don't have the choice of investing in debt instruments. Investment is purely restricted to equities.

Furthermore, an ELSS is not subjected to administration charges while it also enjoys tax benefits under Section 80C. So if your aim is to save taxes through investment and make a tidy profit at the same time, then ELSS is just what you need. But alas, there is no safety net for ELSS schemes that do not perform well. Consequently, this places ELSS at the pinnacle of the Wealth Pyramid.

Final Scores

Appetite Factor Rating for ULIP's: modest appetite for risk - mostly for the timid man.

Appetite Factor Rating for ELSS's: sizable appetite for risk - definitely for the macho man!

Features of Umbrella Insurance Quote For Homeowners

If only you can foresee what will happen in the future then there would be no need to ready yourself and your property from any unpredictable events. But that is impossible. Although you can direct what your future will be with the choices that you make, there are just some external factors that are beyond your own control. These factors can even let you experience financial disaster especially if you do not plan and prepare yourself for what can happen that will be a threat to your personal property.

The basic homeowner's insurance is what you usually have. It protects you from any damages in the structure of your home. Sometimes the claim that you will get is not enough however it can already be a great help. You would definitely avail it than to have nothing at all. Since your home and your property is of great value, you would do anything to secure it. However, certain events can go beyond your control that even your stun gun tazers could not stop it.

To complete it all, you must get an umbrella insurance quote that will reinforce your basic insurance policies. Fortunately, this kind of insurance is affordable and the claim is quite hefty. They can go to a million and more by just paying a smaller amount of premium. You can get it from the same company where you purchase your basic insurance so that you will be able to get a good deal. Usually the premium would depend on certain things like driving records of family members and of course your ability to pay.

When you decide to get from an umbrella insurance company, you must think of your property and of course your place of residence. If you think that you are prone to natural calamities, lawsuits from well-off neighbors, or pets which you think would cause harm to other people then you better consider paying for a higher premium. This means that if these events happen beyond your control, you will have an insurance that will cover for your financial struggle. It would be easier for you to handle the situation that you never expected to happen.

There are specific exceptions though when it comes to this type of insurance that is why you have think about it very well before you purchase just like what you do when you buy valuable things for yourself like a c2 tazer. Some insurance companies might not include in your policy the injury of some of your workers in the house or any business transaction liabilities. You need to inquire first the coverage of the insurance that you are trying to avail so that you will learn about the limits and the benefits that you will get from it.

Although there are some exceptions, you will be able to experience its features like giving you help when you really need money the most especially when it comes to lawsuits. Going into court requires a lot of money and they will be able to aid you with that especially when covered by your premium. So think very well whether you will avail one or not. Weigh its benefits to you so that you will be able to gain your money's worth.

Understanding Umbrella Insurance

Umbrella insurance provides blanket liability protection for individuals and their assets. These policies go above and beyond the limits of a primary auto and home insurance policy, and also fill-in the gaps in those policies. The high limits of an Umbrella policy protect an individual in the event of a large dollar amount claim. Most Umbrella plans begin at one million dollars in coverage, but they can be purchased with much higher coverage limits.

For instance, an umbrella policy would pay out in the event of auto accident in which someone was severely injured or killed. In the event of a severe traffic related injury, liability payouts in the court system have been as high as millions of dollars. With most people only carrying $100,000 per person and $300,000 per accident liability limits, its easy to see how necessary an umbrella policy is to one's financial health. Without that coverage, the at-fault party is responsible for the remainder of the payout after the policies coverage limits have been exhausted. So, if you cause an accident that results in $800, 000 in damages to one person, and only carry liability limits of $100,000 per person and $300,000 per accident, you will be stuck paying $700,000 of the bill.

The need for umbrella coverage is large, although largely unfamiliar to many people. Most people who have a net worth under $500,000 assume they do not need such a high liability limit. What most of these people don't realize is that, in the event of a large dollar amount claims, not only can real property be taken, but future earnings can also be garnished to pay for the remainder of the bill after the insurance limits have been exhausted. This makes Umbrella coverage a crucial coverage for any wage earner to carry.

The cost for this type of coverage is relatively low. The premium depends on the risk, of course, but the average annual cost for one million dollars in coverage is $200-300. The coverage amount of liability blankets the coverage on your existing policy (i.e. if you had $500,000 liability limit on your home and a one million dollar umbrella policy, you would have coverage up to $1.5 million). Umbrella insurance can also fill in the gaps of liability coverage where your home or auto policies may not provide coverage. For instance, umbrella policy can provide coverage in the event of libel, false arrest, slander, or invasion of privacy. In this sue happy world we live in, many are finding that it is better to have ample coverage than try to save a few dollars.