The Greater The Risk The More Insurance Will Cost.
If you have assets worth protecting, umbrella insurance can cover the gaps in your basic homeowners insurance and auto insurance policies. Personal umbrella insurance (also called gap insurance) provides an extra cushion of coverage that takes up the slack between where your homeowners or auto insurance caps and the additional expenses you might incur such as medical payments, property damage, court costs and similar charges. Typical umbrella coverage starts at $1 million, but you can buy up to $10 million in coverage. Usually, umbrella insurance is purchased as an add-on to an existing policy. Insurers may require that you have a minimum amount of coverage on your home or auto (or both) before theyll sell you an umbrella policy. Before you buy umbrella insurance, make sure you need it. Analyze your exposure to risk. What is the likelihood of someone being injured on your property? Theyre higher than normal if you own a dog or have swimming pool, for example. Do you own valuable assets like a home, savings account, stocks or other items that would be at risk if you were sued and your insurance didnt cover all the loss or damage? If you answered yes to either question, youre a good candidate for umbrella insurance. You should expect to pay a higher premium (for example an additional $150 per year for $1 million gap policy), but you can lessen the impact with a higher deductibles on your basic home or auto policy. You can also take advantage of money-saving discounts such as using the same insurer for all your policies. You should also compare various policies to see if switching to another company for your basic policies and umbrella coverage makes sense. Be sure you get the coverage you need.
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