Umbrella insurance is the secondary layer of protection for when your primary insurance fails to cover your liabilities. You could save your life’s savings and protect your hard-earned assets at a small additional cost for umbrella insurance.
This article will walk you through what umbrella insurance is, what it covers, how much it costs, what it and what it does, why you need it, and how it can help you.
[ez-toc]
What is umbrella insurance?
It is a supplement that helps cover the liabilities that your initial insurance plan for automobiles, or other aspects of your life, has exhausted. To understand it more clearly, it simply is a backup insurance plan for your other insurance plans to ensure that one accident does not get you bankrupt. It springs into action when your insurance limits are exhausted. Your assets are safe till you hit the limit of your umbrella insurance.
Examples of umbrella insurance; how does it work?
Here are some real user reviews about umbrella insurance and its working procedures.
What does umbrella insurance cover?
- Injuries to others(Both mental and physical).
- Damage to someone else’s property.
- Lawsuits where you are accused of defaming someone else.
- Lawsuits where you are the one being slandered.
- Liable cases beyond your own country. (Injuries, damages or lawsuits abroad)
(Be thorough with the terms and conditions of your policy, they tend to differ from company to company)
How much does an umbrella insurance policy cost?
The cost differs from company to company. However, we can generalize the cost; on average, it costs about $150-$250 to get the $1M umbrella coverage. It additionally costs another $100 for an additional $1M coverage.
Why do you need an umbrella insurance policy?
If you have amassed a lot of wealth or were born into it, it would be smart to get the umbrella insurance policy because the chances of you being sued are very high. It does not protect you from legal obligations but, it protects a large portion of your assets just in case you lose your case.
That does not mean people with a normal day job should not get it. Understand this, the person suing you won’t ask for how much you can offer but how much they can take. And you never know when you encounter a bad accident or when you mistakenly cause damage to someone else’s property. So, get your policy as soon as you can.
What is not covered by an umbrella policy?
- Your bodily injury
- Your property
- Your criminal acts if they prove to be true
- Damages caused by war, nuclear radiation, or terrorism.
- Your business losses
You may also like:
- Is it worth getting health insurance if you are healthy?
- List of Insurance Companies in Nepal
- Understanding Bike Insurance in Nepal
FAQs
Is it an insurance for an insurance policy?
Is an umbrella insurance policy expensive?
Do I get a free attorney if I have an umbrella insurance policy?
Why should I get umbrella insurance?
Is it necessary to get umbrella insurance?
Is umbrella insurance a waste of money?
Will my umbrella insurance cover my injuries?
Does Nepal have umbrella insurance?
Conclusion
From a practical point of view; you own a car with airbags. Why? So that you’re safe in case an accident happens. This does not necessarily mean you’re anticipating getting hit on the highway every time you drive. However, you wouldn’t want to get a cheaper car with no airbags and just trust your skillful driving. You never know what accidents you may get into or what lawsuits you may get involved in, this insurance is a precaution to ensure your lifestyle does not change in case it happens.
You wouldn’t get a car without airbags even if they were cheaper by a landslide, would you? Would you advise a loved one to skip the airbags?