Umbrella insurance is designed to work as a secondary form of insurance if your car insurance or home insurance in Salt Lake City doesn’t provide enough coverage. It is a liability insurance that a lot of people think is only necessary for those who have a lot of assets or a great deal of wealth. However, you might be surprised at who could benefit from an umbrella policy.
Understand Why Umbrella Insurance is Necessary
First, you need to know how umbrella insurance works. Say you have a car insurance policy that provides $75,000 of coverage for a single car accident. Something happens where you’re responsible for a multi-car accident and there are several people who are injured. Their medical costs combined add up to $150,000. The insurance company pays the $75,000. Guess who pays the other $75,000. You do.
If you don’t happen to have $75,000 lying around in a checking account somewhere, you will have to come up with the money. The other parties could file a lawsuit and you may have to use your assets, including your home or retirement account to pay the amount owed.
The above example was actually a low amount. Many lawsuits run into several hundred thousand dollars or even millions. You could end losing a lot of assets if you don’t have an umbrella policy.
Who Needs Umbrella Insurance
Anyone who has assets they don’t want to lose needs to purchase an umbrella policy to go along with their home or auto insurance in Salt Lake City. The more assets you have, the more you need this insurance.
However, you also need to consider adding an umbrella policy to your insurance plans even if you don’t have any assets now. You may be required to pay off what is owed from your future earnings. This means you could end up paying for years until the entire debt is paid off.
To determine if you need this additional policy, you need to look at your home and car insurance. Consider updating your policies with a larger amount. Then, if you still feel you don’t have enough coverage, you may want to get a quote for an umbrella policy.
Much of the time, you can get umbrella insurance for a low cost. It is often affordable for just about any budget. You also get to have the peace of mind of knowing you’re covered if you should ever be found at fault for a serious accident.
Don’t think it couldn’t happen to you. An accident could occur that is deemed to be your fault which would end up costing millions of dollars. Health care isn’t cheap and some injuries can result in long-term care, such as multiple surgeries and physical therapy. If there’s permanent damage, the person may be able to request lost wages for their injury.
Just look at the lawsuits that occur where the person gets several millions of dollars. Almost anyone can benefit from getting an umbrella insurance policy to protect them, their family and their assets.