You may think that you have plenty of car insurance ? after all, many states require liability limits of $50,000 or more. But high as those limits may seem, it wouldn?t take much to exceed them, especially in a serious injury accident.
That?s where umbrella car insurance comes in. This type of insurance gives you extra protection against costs that exceed your regular car insurance coverage.
What is Umbrella Coverage?
Umbrella car insurance is actually a bit of a misnomer. An umbrella policy covers any and all liability policies you have in force, including auto insurance policies and homeowners? policies. It basically gives you additional coverage above and beyond the normal limits of your liability.
For example, if you crash into an expensive car and seriously injure the other driver and passengers, even if you have high limits on your auto liability and medical coverage, it may not be enough to pay for the damages and medical costs incurred by the other parties involved in the accident.
photo credit: h.koppdelaney
If you have no other insurance, the driver or his insurance company can file a lawsuit against and you could be held personally responsible for paying all damage, which may involve seizure of assets and garnishment of future wages to help pay any judgments against you. However, if you have an umbrella auto insurance policy, or umbrella insurance attached to your homeowners? policy, that coverage will kick in when your other insurance is exhausted.
How Much Coverage Do You Get?
Umbrella policies typically come in denominations of $1 million. So if you have $300,000 of coverage on your auto policy, and umbrella policy would give you up to $1.3 million of coverage.
Umbrella policies cover many situations involving your home, as well, including someone slipping and injuring himself on the sidewalk in front of your home. The policies may also cover other instances in which you may be sued and have your assets as risk, including cases of libel or slander or decisions you could make as the member of a board or organization.
Despite the high limits, umbrella policies don?t cost that much. The typical fee may be about $200 annually per $1 million of coverage, meaning it can be an affordable option for many drivers on the roads.
Save on Your Auto Insurance
Looking to lower your auto insurance rates? At BestCarInsuranceCompanies.net, you can get free quotes from leading insurers in your state. Simply enter your zip code to get started on saving!
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