All Financial Wisdom

Umbrella Insurance: What and Why?

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What is it and why should you get it?
Simply, umbrella insurance is a special kind of insurance that provides coverage for “rainy day” situations. It is an extended policy to provide extra liability coverage for your homeowners, auto, or boat insurance. It is in addition to those policies after they get exhausted on a claim. It goes above and beyond the average policy and helps protect your other assets. Coverage is usually $1million to $2million and can cost just $5 a month.

Who needs it?
It is recommended for businesses and real estate investors since they typically have large assets and invite people onto their property on a daily basis. It helps cover when “sh*t hits the fan” big time. Individuals that have considerable assets, like stocks and real estate, can use this kind of insurance to provide security of those assets. For example, just because they were reckless with a car, wouldn’t necessarily mean they would loose their complete retirement portfolio.

How to get it?
I would talk to your insurance company you currently are dealing with. They will most likely know your current policies and provide you with a discount for being a repeat customer.

Resources:
https://www.geico.com/information/aboutinsurance/umbrella/
http://en.m.wikipedia.org/wiki/Umbrella_insurance
http://www.bankrate.com/finance/insurance/what-is-umbrella-insurance.aspx
https://www.travelers.com/personal-insurance/umbrella-insurance/coverage-basics.aspx

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