So, chances are you’ve heard of umbrella insurance. Or maybe you just purchased an umbrella policy, and now you’re wondering what assets an umbrella insurance policy will cover. This article will cover the different assets that an umbrella policy will protect.

What Is an Umbrella Insurance Policy?

An umbrella insurance policy extends the limits of the insurance coverage provided by your existing policies in case of liability. If you get sued, it covers you for any costs or damages that may exceed your current coverage limits. 

Depending on your needs, you may benefit from personal umbrella or commercial, aka business umbrella insurance. 

Why Should I Get an Umbrella Insurance Policy?

It’s a good idea for every home and business owner to get an umbrella policy. The coverage will give you extra protection if you’re found liable for damages above and beyond your standard liability coverage. This protection can help you avoid bankruptcy if you’re found liable for damages that cost more than you can pay. 

In essence, a general liability policy may not be enough to keep your home or business from suffering major losses that might cause financial harm. 

What Assets Will Your Umbrella Policy Cover?

An umbrella insurance policy differs slightly from traditional homeowners’ or car insurance. Essentially, umbrella insurance is a form of liability insurance, meaning that it covers damages in the cases where another person (or company) sues you. If you suffer a loss that only affects you, such as a fire or a flood that damages your property, the umbrella policy will typically not cover that.

This does not mean that umbrella insurance does not protect your property! On the contrary, one of the primary causes of bankruptcy in the United States is a lawsuit that takes every penny you’ve worked hard for and forces you to sell off your assets.

Umbrella Insurance vs. Excess Liability Insurance 

 Explore your options for excess insurance if you want a policy that distinctly covers your assets. Umbrella Insurance Policies and Excess (Secondary) Insurance Policies are similar in that they both provide coverage that your other policies do not. Umbrella Insurance Policies protect you against civil liability (getting sued).

Excess Liability Insurance, on the other hand, provides additional coverage for ONE of your liability policies — usually general liability insurance. It kicks in when that policy hits its limit. 

Meanwhile, commercial umbrella insurance provides extra coverage for MANY of your liability policies. 

Example

If your house floods and your homeowner’s insurance covers $200,000 worth of damages, but you have $300,000 worth of damages, an excess insurance policy would cover the remaining $100,000.

We’re Here to Help!

Umbrella insurance and excess liability insurance are crucial to protecting you and your family from financial harm. No matter your situation, contact Magnolia Insurance Agency if you’re looking for quality insurance coverage for your home or business! Call us at 770-213-5171 or fill out our inquiry form online for help on what assets an umbrella insurance policy will cover. Our licensed experts will walk you through your options and help you choose the policy that will bring safety and security to you, your family, and/or your life’s work.

Umbrella Policy / By Magnolia Insurance Agency