McKayla Girardin, Car Insurance Writer
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Umbrella insurance is a type of insurance policy that extends the liability limits of an underlying policy, like homeowners or auto insurance, to provide more protection during liability claims. Umbrella insurance can also protect the policyholder's assets against things like libel and slander lawsuits.
Key Things to Know About Umbrella Insurance
- Umbrella insurance is specifically designed for people who have at least $1 million in assets and who want extra protection beyond what their auto or homeowners liability insurance can offer.
- Most insurers require policyholders to have the highest available liability limits on their home or auto insurance, usually $300,000 to $500,000, before they can qualify for an umbrella policy.
- Umbrella insurance covers the victims’ costs in situations where you are at-fault, such as car accidents or if someone is injured at your home.
- Umbrella insurance covers things beyond what normal liability insurance covers, such as libel, slander, false arrest, malicious prosecution, and liabilities when overseas.
- Umbrella insurance costs an average of $150 to $300 annually, and each additional $1 million in coverage adds another $50 to $75 per year.
To learn more, check out WalletHub’s guide to umbrella insurance.
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