Think of umbrella insurance as an extra safety net that kicks into gear when your existing liability coverage on your insurance policies is exhausted. In short, an umbrella policy protects your existing assets and future assets from the cost of losing a lawsuit because of a vehicle accident, incident at your home, or any other third party liability claim. Many people assume that you have to be wealthy to need an umbrella policy, but this is not true because, even if you don’t have any assets, your wages could be garnished if you are sued and lose.
Let’s look at an example. You are in an automobile accident that results in significant injury to another person and damage to a home. In total, the damages that you are responsible for are $500,000. Your auto insurance policy has liability coverage up to $300,000 which means that you need to come up with the extra $200,000. If you have an umbrella policy, then you will be in the clear because it will pick up the tab after your auto insurance runs out. However, without an umbrella policy, you’ll be on the hook to find a way to pay the remaining $200,000.
In addition to covering personal incidents that you are fault for, umbrella coverage is also extended to your dependent children, rental properties, and personal lawsuits arising from slander, libel, defamation of character, or false arrest. Be sure to check with your insurance provider for specific information on what your policy covers.
For more information, schedule a no-obligation consultation with CG Insurance Agency in Williamston, MI where our friendly and knowledgeable team will answer all your questions and customize a policy that best meets your needs.