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No, an umbrella policy is not a waste of money for people with more than $500,000 in assets. Umbrella policies provide liability coverage beyond the limits of another insurance policy, and even if a policyholder never files an umbrella claim, the low cost of coverage is usually worth the added financial protection.
Most auto insurance policies only provide up to $500,000 in liability coverage, and a good rule of thumb is to make sure you have enough liability insurance to cover your assets. So, if your net worth is $1 million, for example, then you should purchase an umbrella policy, which only costs an average of $150-$300 annually.
On the other hand, umbrella insurance is generally not a good investment for individuals without many assets. Their car, home, or renters insurance probably provides enough coverage already.
For more information, check out WalletHub’s complete guide to umbrella insurance.
People also ask
What does umbrella insurance cover?
Umbrella insurance covers injuries, property damage, certain lawsuits, and personal liability situations that exceed your home and auto liability coverage. An umbrella policy extends your liability insurance limits and offers protection for situations not covered by a standard liability policy, such as libel or slander.
On the other hand, umbrella… read full answer
show lessWhat is not covered by an umbrella policy?
An umbrella insurance policy does not cover your own injuries or damage to your personal property. Personal umbrella insurance also will not cover intentional acts, criminal behavior, damage caused while you’re performing business activities, or damage from certain dogs or vehicle types. If you need umbrella insurance for business purposes,… read full answer
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