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The benefit of having an umbrella policy is expanded liability coverage beyond what a regular car insurance or home insurance policy would cover. Umbrella policies protect your assets by extending the liability limits on your existing insurance and covering legal fees if you are sued for libel or slander.
Benefits of an Umbrella Policy
Protects Your Assets
Umbrella policies help prevent your savings, property, vehicles, or collectible items from being at risk in a lawsuit. Umbrella insurance also can protect your future wages from being garnished.
Protects You in Accidents You Cause
Umbrella insurance policies can protect you after car accidents and accidents involving ATVs or boats, paying for the victim’s medical expenses or property damage, as well as your legal fees if you are sued because of the incident.
Protects When You’re Away From Home
If you’re sued because someone is injured on your property while you’re away, such as a house sitter, gardener, or even a relative, umbrella insurance can still protect your assets.
Protects Your Family
If you’re sued by another parent after an incident at your child’s school, such as your child giving peanut-butter candy to a kid with a nut allergy or your child being involved in a fight, an umbrella insurance policy can help protect your assets from being at risk and assist with the legal fees.
Expands Rental Property Liability Insurance
If you own rental property, umbrella insurance can expand your rental property liability insurance limits. Umbrella insurance can give you greater protection if, for example, you are sued after a guest is injured on the property or a tenant sues for wrongful entry.
Helps With Libel, Slander, and Character Defamation Suits
Whether you are sued by a company for leaving a negative review online or by a neighbor for spreading a rumor about them, an umbrella insurance policy can protect your assets from being at risk in the event of a libel, slander, or character defamation lawsuit.
Umbrella insurance policies usually provide coverage in $1 million increments. A $1 million umbrella policy costs an average of $150 to $300 per year, and each additional $1 million in coverage only adds around $50 to $75 per year.
Your normal auto or homeowner liability insurance plan may be able to cover the majority of a victim’s medical expenses and property damage after an accident, but they may still decide to sue for even more. That is where an umbrella policy steps in to protect you, your property, and any other assets you have to your name.
To learn more, check out WalletHub’s guide to umbrella insurance.
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