A liability insurance policy is designed to help you repay others if you are legally responsible for causing them harm. For instance, your auto liability insurance will allow you to compensate another driver for their bodily injuries or property damage when you caused the accident that harmed them.

However, your liability policy will have its limits, even though there’s no guarantee that a third party’s claim will stay within those limits. At times when claims exceed the value of your policy, an umbrella insurance policy can step in. It is designed to provide coverage when you have exhausted your standard benefits, and it can protect you from the financial devastation that might arise from significant challenges.

A single personal umbrella policy can be used in conjunction with numerous policies at the same time, including:

Most policies will offer at least $1 million in additional protection, and many will cover liabilities that aren’t covered at all by your basic policies. By integrating a liability plan into your personal insurance portfolio, you’ll open yourself up to a significant amount of additional protection.

You hope to never have to use umbrella insurance, but you can’t prevent every accident that might necessitate a liability insurance claim. Plus, you certainly can’t guarantee that the third-party losses involved will be totally covered by your standard limits. 

Suppose that you have homeowners insurance with a liability limit of $500,000. However, a neighbor falls down your steps, sustains a severe injury and sues you for $2 million worth of medical bills, lost income and other damages. That’s a $1.5 million difference between what you owe this neighbor and what your homeowners liability policy is going to pay. 

Umbrella liability insurance will help you pay for that gap in coverage. As you can see, the added benefit of this affordable coverage will go above and beyond to help you get away from some of the most challenging accidents that life might throw your way.

Anyone who wants to be prepared for a worst-case scenario should consider investing in umbrella coverage. It’s an especially important benefit for those with high net-worths, who are often at risk of proportionally higher liability lawsuits.  

These policies are highly affordable, especially when weighing the significant and diverse benefits that you can recoup from your plan when the need arises.