Umbrella Insurance for Greater Coverage
March 16th, 2010 | 
Author: When the amount of a claim against you exceeds the coverage provided by your home or auto insurance policy, you are saddled with the prospect of settling this excess liability on your own. Your insurance company will not cushion you against this contingency. However, there is a way out. To overcome this eventuality, you can obtain an excess liability policy, or an umbrella policy.
This policy will give you the required cushion against any claim exceeding the amount covered by your normal insurance policy. For example, suppose your auto insurance policy covers claims of accidental pedestrian injury up to an amount of $20000. If an accident does occur, and a claim of $50000 dollars is adjudicated against you, the insurance company will only pay the $20000 agreed upon, and you will have to pay the balance $30000 out of you personal funds. If you do not have the cash or any other liquid asset, then your home, or some other fixed assets could be at stake. You may even be reduced to a state of bankruptcy. This is where an umbrella policy can help you. An umbrella policy will take care of the excess amount of $30000 dollars that you would have had to pay from you own funds.
The umbrella policy expands the coverage offered by your home or auto policy. You can purchase this policy for coverage of up to five million dollars. Moreover, the premium is very low and you may have to pay just $300 to $400 a year for this coverage.
When the amount of a claim against you exceeds the coverage provided by your home or auto insurance policy, you are saddled with the prospect of settling this excess liability on your own. Your insurance company will not cushion you against this contingency. However, there is a way out. To overcome this eventuality, you can take an excess liability policy, or an umbrella policy.
This policy will give you the required cushion against any claim exceeding the amount covered by your normal insurance policy. For example, suppose your auto insurance policy covers claims of accidental pedestrian injury up to an amount of $20000. If an accident does occur, and a claim of $50000 dollars is adjudicated against you, the insurance company will only pay the $20000 agreed upon, and you will have to pay the balance $30000 out of you personal funds. If you do not have the cash or any other liquid asset, then your home, or some other fixed assets could be at stake. You may even be reduced to a state of bankruptcy. This is where an umbrella policy can help you. An umbrella policy will take care of the excess amount of $30000 dollars that you would have had to pay from you own funds.
Further, many companies will not offer you the umbrella policy unless you have your home or auto insured with them. They may also require you to maintain a certain level of liability on your home or auto insurance.
The umbrella policy does not only cover your cars and homes, but also offers personal injury protection which may include false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry or eviction. The terms may vary according to each company, and from one state to another.
The umbrella policy is an excellent way to protect yourself against expenses for claims exceeding the coverage provided by your regular insurance policy. It can be bought for a very low annual premium, and proves very helpful in protecting your personal assets from lawsuits and legal action.
Joseph Kenny
http://www.articlesbase.com/non-fiction-articles/umbrella-insurance-for-greater-coverage-72718.html
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Personal Finance Help?
I have some of the answers but need to make sure they are right before I submit it for my homework grade. If anyone could help out with even one or two that would be soo great! Thank you
1.
Wearing a seat belt in an automobile to protect yourself against injury is an example of ____________ risk.
A) Reducing
B) Assuming
C) Pooling
D) Shifting
2.
Which of the following would be covered by a home insurance policy?
A) Hospital expenses for surgery
B) Damage to another person’s car when driving
C) Accidental injury to a coworker on the job
D) Wind damage to your roof
3.
The ____________ coverage of a home insurance policy would cover accidental damage to another person’s property by a member of your family.
A) Supplementary
B) Personal property
C) Medical payments
D) Additional living expenses
4.
An umbrella policy is designed to cover
A) Expensive personal property
B) Additional buildings on your property
C) Property when traveling away from home
D) Major personal liability suits
5.
Most home insurance policies provide coverage for
A) Flood damage
B) Earthquake damage
C) Personal property floaters
D) Medical payments
6.
Renter’s insurance would include coverage for
A) Flood damage
B) Personal property
C) Building and other structures
D) Umbrella liability
7.
The ____________ form of homeowner’s insurance is designed to cover the personal property of renters against the risks listed in the policy. a.b.c. D.
A) Basic
B) Tenant’s
C) Condominium
D) Broad
8.
Which of the following coverage would pay for medical care for people who were injured in your automobile?
A) Medical payments
B) Bodily injury liability
C) Collision
D) Comprehensive
9.
A home is insured for $200,000 against fire and other damages. The homeowner’s insurance policy provides for additional living expenses limited to 15 percent of the home’s coverage amount. What is the maximum amount the insured will receive in additional living expenses if the house is damaged by fire?
A) $15,000
B) $20,000
C) $30,000
D) $40,000
10.
Your home insurance policy has a $250 deductible. If a small fire causes $600 damage to your home, what amount of the claim would the insurance company pay?
A) $250
B) $350
C) $450
D) $600
1.Reducing
2.Wind damage to roof
3.Personal Property
4.Major Liability suits
5.Medical Payments
6.Personal property
7.Tenant’s
8.Comprehensive
9.$30K
10.$350
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